Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 58999 

Authority: Sec. 3(a), Pub. L. 94–409, 90 

Stat. 1241 (5 U.S.C. 552b); sec. 101(a)(11), 

Pub. L. 93–463, 88 Stat. 1391 (7 U.S.C. 4a(j) 

(Supp. V, 1975)), unless otherwise noted. 

10. Section 147.3 is proposed to be 

amended by revising paragraphs (b)(4)(i) 

and (b)(8) to read as follows: 

§ 147.3 General requirement of open 

meetings; grounds upon which meetings 

may be closed. 

* * * * * 

(b) * * * 

(4)(i) Disclose trade secrets and 

commercial or financial information 

obtained from a person and privileged 

or confidential including, but not 

limited to: 

(A) Reports of stocks of grain, such as 

Forms 38, 38C, 38M and 38T, required 

to be filed pursuant to 17 CFR 1.44; 

(B) Statements of reporting traders on 

Form 40 required to be filed pursuant to 

17 CFR 18.04; 

(C) Statements concerning special 

calls on positions required to be filed 

pursuant to 17 CFR part 21; 

(D) Statements concerning 

identification of special accounts on 

Form 102 required to be filed pursuant 

to 17 CFR 17.01; 

(E) Reports required to be filed 

pursuant to parts 15 through 21 of this 

chapter; 

(F) Reports concerning option 

positions of large traders required to be 

filed pursuant to part 16 of this chapter; 

(G) Form 188; and 

(H) The following reports and 

statements that are also set forth in 

paragraph (b)(8) of this section, except 

as specified in 17 CFR 1.10(g)(2) or 17 

CFR 31.13(m): Forms 1–FR required to 

be filed pursuant to 17 CFR 1.10; 

FOCUS reports that are filed in lieu of 

Forms 1–FR pursuant to 17 CFR 1.10(h); 

Forms 2–FR required to be filed 

pursuant to 17 CFR 31.13; the 

accountant’s report on material 

inadequacies filed in accordance with 

17 CFR 1.16(c)(5); and all reports and 

statements required to be filed pursuant 

to 17 CFR 1.17(c)(6); 

* * * * * 

(8) Disclose information contained in 

or related to examination, operating, or 

condition reports prepared by, on behalf 

of, or for the use of the Commission or 

any other agency responsible for the 

regulation or supervision of financial 

institutions, including, but not limited 

to the following reports and statements 

that are also set forth in paragraph 

(b)(4)(i)(H) of this section, except as 

specified in 17 CFR 1.10(g)(2) or 17 CFR 

31.13(m): Forms 1–FR required to be 

filed pursuant to 17 CFR 1.10; FOCUS 

reports that are filed in lieu of Forms 1–

FR pursuant to 17 CFR 1.10(h); Forms 

2–FR required to be filed pursuant to 17 

CFR 31.13; the accountant’s report on 

material inadequacies filed in 

accordance with 17 CFR 1.16(c)(5); and 

all reports and statements required to be 

filed pursuant to 17 CFR 1.17(c)(6); 

* * * * * 

Issued in Washington, DC, on October 4, 

2005 by the Commission. 

Jean A. Webb, 

Secretary of the Commission. 

[FR Doc. 05–20258 Filed 10–7–05; 8:45 am] 

BILLING CODE 6351–01–P 

SOCIAL SECURITY ADMINISTRATION 

20 CFR Parts 404 and 416 

[Regulations Nos. 4 and 16] 

RIN–0960–AE93 

Exemption of Work Activity as a Basis 

for a Continuing Disability Review 

AGENCY: Social Security Administration 

(SSA). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: We are proposing to amend 

our regulations to include rules to carry 

out section 221(m) of the Social Security 

Act (the Act). Section 221(m) affects our 

rules for when we will conduct a 

continuing disability review if you work 

and receive benefits under title II of the 

Act based on disability. (We interpret 

this section to include you if you 

receive both title II disability benefits 

and Supplemental Security Income 

(SSI) payments based on disability.) It 

also affects our rules on how we 

evaluate work activity when we decide 

if you have engaged in substantial 

gainful activity for purposes of 

determining whether your disability has 

ended. In addition, section 221(m) of 

the Act affects certain other standards 

we use when we determine whether 

your disability continues or ends. We 

are also proposing to make certain other 

revisions to our regulations for how we 

determine whether your disability 

continues or ends. These other proposed 

revisions would codify our existing 

operating instructions for how we 

consider certain work at the last two 

steps of our continuing disability review 

process. In addition, we are proposing 

to incorporate into our disability 

regulations some rules which are 

contained in another part of our 

regulations and which apply if you are 

using a ticket under the Ticket to Work 

and Self-Sufficiency program (the Ticket 

to Work program). Finally, we are 

proposing to amend our regulations to 

eliminate the secondary substantial 

gainful activity amount that we 

currently use to evaluate work you did 

as an employee before January 2001. 

DATES: To be sure that your comments 

are considered, we must receive them 

by December 12, 2005. 

ADDRESSES: You may give us your 

comments by: using our Internet facility 

(i.e., Social Security Online) at http:// 

policy.ssa.gov/pnpublic.nsf/LawsRegs or 

the Federal eRulemaking Portal: http:// 

www.regulations.gov; e-mail to 

regulations@ssa.gov; telefax to (410) 

966–2830; or letter to the Commissioner 

of Social Security, PO Box 17703, 

Baltimore, MD 21235–7703. You may 

also deliver them to the Office of 

Regulations, Social Security 

Administration, 100 Altmeyer Building, 

6401 Security Boulevard, Baltimore, MD 

21235–6401, between 8 a.m. and 4:30 

p.m. on regular business days. 

Comments are posted on our Internet 

site, or you may inspect them physically 

on regular business days by making 

arrangements with the contact person 

shown in this preamble. 

Electronic Version: The electronic file 

of this document is available on the date 

of publication in the Federal Register at 

http://www.access.gpo.gov/su_docs/ 

aces/aces140.html. It is also available 

on the Internet site for SSA (i.e., Social 

Security Online) at http:// 

www.socialsecurity.gov/regulations/. 

FOR FURTHER INFORMATION CONTACT: 

Kristine Erwin-Tribbitt, Policy Analyst, 

Office of Program Development and 

Research, Social Security 

Administration, 6401 Security 

Boulevard, Baltimore, Maryland 21235–

6401. Call (410) 965–3353 or TTY (410) 

966–5609 for information about these 

proposed rules. For information on 

eligibility or filing for benefits, call our 

national toll-free number 1 (800) 772–

1213 or TTY 1 (800) 325–0778. You may 

also contact Social Security Online at 

http://www.socialsecurity.gov/. 

SUPPLEMENTARY INFORMATION: 

What is the purpose of this notice of 

proposed rulemaking (NPRM)? 

In this NPRM, we propose to amend 

our disability regulations to carry out 

section 221(m) of the Act. These 

proposed changes would apply to you if 

you are a working beneficiary who is 

entitled to Social Security disability 

benefits under title II of the Act and you 

have received such benefits for at least 

24 months. If you are a person who 

meets these requirements, we propose to 

change our rules on when we will start 

a continuing disability review to decide 

whether you are still disabled. In 

addition, we propose to amend our rules 

to provide that, under the medical 

59000 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

improvement review standard 

sequential evaluation process, we will 

not consider the activities you perform 

in your work if they support a finding 

that you are no longer disabled. We also 

propose to amend our regulations to 

provide that we will not use the 

activities you perform in work to 

support a finding that you are no longer 

disabled when deciding if the work you 

do shows that you are able to perform 

substantial gainful activity. Specifically 

we will not compare your work activity 

to that of unimpaired people in your 

community who are doing the same or 

similar work as their means of 

livelihood. Also, if your earnings are 

less than the substantial gainful activity 

limit, we will not make a determination 

that your work is worth more than the 

substantial gainful activity amount. 

In this NPRM, we also propose to 

make certain other changes to our 

regulations that may apply to you even 

if you are not affected by section 221(m) 

of the Act. We are proposing to clarify 

our rules for how we consider work 

activity at the last two steps of the 

medical improvement review standard 

sequential evaluation process when we 

determine if you are still disabled. The 

proposed rules will codify in our 

regulations interpretations of our 

standards for determining whether 

disability continues under title II and 

title XVI that we have been using in 

operating instructions for some time. 

These proposed rules also provide that 

these interpretations apply when we 

determine whether you are entitled to 

expedited reinstatement of benefits 

under section 223(i) of the Act or 

eligible for expedited reinstatement of 

benefits under section 1631(p) of the 

Act. The proposed changes affect you if 

you are entitled to Social Security 

benefits based on disability under title 

II or you are an adult who is eligible for 

SSI payments based on disability under 

title XVI and you work during your 

current period of entitlement or 

eligibility based on disability. Also, the 

proposed rules affect you if you request 

reinstatement of benefits. 

We are also proposing to incorporate 

into our disability regulations some 

rules which are contained in another 

part of our regulations and which apply 

to you if you are using a ticket under the 

Ticket to Work program. In addition, we 

are proposing to revise our rules for 

evaluating work activity you performed 

as an employee prior to January 2001 to 

eliminate the use of the secondary 

substantial gainful activity amount. We 

are also proposing to make some minor 

clarifications and corrections of other 

rules. 

Ticket to Work and Work Incentives 

Advisory Panel 

During the preparation of these 

proposed rules, we consulted with the 

Ticket to Work and Work Incentives 

Advisory Panel. 

When will we start to use these rules? 

We will not use these rules until we 

evaluate the public comments we 

receive on them and issue final rules in 

the Federal Register. If we publish final 

rules, we will state in the notice the date 

on which they go into effect, explain in 

the preamble how we will apply them, 

and summarize and respond to the 

substantive public comments. 

What are continuing disability reviews 

and when do we start them? 

After we find that you are disabled, 

we are required by the Act and our 

regulations to periodically reevaluate 

whether you continue to meet the 

disability requirements of the Act. (See 

sections 221(i) and 1631(d)(1) and 1633 

of the Act, and §§ 404.1589 and 416.989 

of our regulations.) We call this 

evaluation a continuing disability 

review. In §§ 404.1590 and 416.990 of 

our regulations, we explain that, if you 

are entitled to or eligible for disability 

benefits, you must undergo regularly 

scheduled continuing disability 

reviews. We also explain that in some 

circumstances, we may start a 

continuing disability review before the 

time of your regularly scheduled 

continuing disability review. 

In §§ 404.1590(b) and 416.990(b) of 

our regulations, we list circumstances in 

which we will start a continuing 

disability review. In most cases, we start 

a continuing disability review because, 

under the Act and our regulations, we 

must evaluate your impairment(s) from 

time to time to determine if you are still 

entitled to Social Security disability 

benefits or eligible for SSI payments 

based on disability or blindness. If you 

are entitled to or eligible for such 

benefits, you are subject to regularly 

scheduled continuing disability reviews 

at intervals ranging from 6 months to 7 

years depending on whether, and the 

degree to which, we expect your 

impairment(s) to improve. 

We may also start a continuing 

disability review because you returned 

to work, and at other times when we 

receive information that raises questions 

about whether you are still under a 

disability, such as when you complete 

vocational rehabilitation services. For 

more information about how we decide 

the frequency of continuing disability 

reviews and when we may start a 

continuing disability review at other 

than scheduled times, see §§ 404.1590 

and 416.990 of our current regulations. 

How do we determine whether your 

disability continues or ends? 

When we do a continuing disability 

review to determine whether your 

disability continues or ends, we use the 

rules in § 404.1594 if you are a Social 

Security disability beneficiary and the 

rules in § 416.994 if you are an adult 

who is eligible for SSI payments based 

on disability. In general, these rules 

provide that we must determine if there 

has been any medical improvement in 

your impairment(s) and, if so, whether 

this medical improvement is related to 

your ability to work. The rules in these 

sections also provide some exceptions 

to this medical improvement review 

standard. 

In § 404.1594(f), we provide an eightstep sequential evaluation process that 

we use when we determine whether you 

are still disabled under title II of the 

Act. We generally follow the steps in 

order. However, we may also find that 

your disability has ended because of one 

of several exceptions to the medical 

improvement review standard described 

in §§ 404.1594(d) and (e). (Since the 

exceptions are in the statute and are not 

affected by section 221(m) or the 

proposals in this NPRM, we do not 

summarize them below.) The eight steps 

are as follows: 

1. Are you engaging in substantial 

gainful activity? If you are (and any 

applicable trial work period has been 

completed), we will find that your 

disability ended. 

2. If you are not, do you have an 

impairment or combination of 

impairments that meets or equals the 

severity of an impairment in our Listing 

of Impairments? If you do, we will 

generally find that your disability 

continues. 

3. If you do not, has there been 

medical improvement? If there has been 

medical improvement as shown by a 

decrease in the medical severity of your 

impairment(s), we go on to step 4. If 

there is no medical improvement in 

your impairment(s), we skip to step 5. 

4. If there has been medical 

improvement, we must determine 

whether it is related to your ability to do 

work. If medical improvement is not 

related to your ability to do work, we go 

on to step 5. If medical improvement is 

related to your ability to do work, we 

skip to step 6. 

5. If we found at step 3 that there has 

been no medical improvement, or if we 

found at step 4 that the medical 

improvement is not related to your 

ability to work, we consider whether 

one of the exceptions to medical 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59001 

improvement applies in your case. If 

none of the exceptions to medical 

improvement applies, we find that your 

disability continues. However, if one of 

the exceptions applies, we will find 

either that your disability has ended or 

that we need to go on to step 6, 

depending on the exception that applies 

in your case. 

6. If medical improvement is related 

to your ability to do work, or if any one 

of certain exceptions to medical 

improvement applies, we will 

determine whether all of your current 

impairments in combination are 

‘‘severe’’ (see § 404.1521 of our 

regulations). If you do not have a 

‘‘severe’’ impairment(s), we will find 

that your disability has ended. 

7. If your impairment(s) is ‘‘severe,’’

we will assess your residual functional 

capacity based on all your current 

impairments and consider whether you 

can still do work you have done in the 

past. If you can do such work, we will 

find that your disability has ended. 

8. If you are not able to do work you 

have done in the past, we will consider 

one final step. Given the residual 

functional capacity assessment and 

considering your age, education, and 

past work experience, can you do other 

work? If you can, disability will be 

found to have ended. If you cannot, 

disability will be found to continue. 

We also use this medical 

improvement review standard to review 

your continuing eligibility if you are an 

adult who receives SSI payments based 

on disability. The sequential evaluation 

process is in § 416.994(b)(5) of our 

regulations, but it has only seven steps 

instead of eight. The seven steps are the 

same as the second through eighth steps 

of § 404.1594(f). We do not have a step 

for you if you are engaging in 

substantial gainful activity because of an 

SSI work incentive provision in section 

1619 of the Act. 

What is substantial gainful activity? 

The term ‘‘substantial gainful 

activity’’ means work activity that 

involves significant physical or mental 

activities and that is done for pay or 

profit. Work activity is gainful if it is the 

kind of work usually performed for pay 

or profit, whether or not a profit is 

realized. 

When will your performance of 

substantial gainful activity affect 

whether you continue to be disabled? 

If you are entitled to Social Security 

benefits based on disability and you are 

working, the work you do may show 

that you are able to do substantial 

gainful activity and are, therefore, no 

longer disabled. If you are engaging in 

substantial gainful activity, before we 

determine whether you are no longer 

disabled because of your work activity, 

we will consider whether you are 

entitled to a trial work period under 

§ 404.1592. We will find that your 

disability has ceased in the month in 

which you demonstrated your ability to 

engage in substantial gainful activity 

following completion of any applicable 

trial work period. See §§ 404.1594(d)(5) 

and (f)(1) of our regulations. Our 

determination that your disability has 

ceased because you demonstrated the 

ability to engage in substantial gainful 

activity is not a determination of 

whether you continue to have a 

disabling impairment (see § 404.1511) 

for purposes of eligibility for a 

reentitlement period (see § 404.1592a) 

following completion of a trial work 

period. If you work during your 

reentitlement period and we determine 

that your disability has ceased because 

your work is substantial gainful activity, 

we will stop your benefits. If you later 

stop engaging in substantial gainful 

activity and you are still within your 

reentitlement period, we will start 

paying your benefits again. In 

determining whether you do substantial 

gainful activity in a month for purposes 

of stopping or starting benefits during 

the reentitlement period, we will 

consider your work in, or earnings for, 

that month (see § 404.1592a(a)(2)(i)). 

If you are receiving SSI benefits based 

on disability, your performance of 

substantial gainful activity does not 

affect your disability status for purposes 

of eligibility for SSI benefits. This is 

because of an SSI work incentive 

provision in section 1619 of the Act. 

How do we evaluate your work as an 

employee to determine if you are 

engaging in substantial gainful activity? 

If you work as an employee, we 

generally use earnings guidelines to 

evaluate your work activity to decide 

whether the work you do is substantial 

gainful activity. If your average monthly 

earnings are more than the primary 

substantial gainful activity amount (i.e., 

$810 per month for non-blind 

individuals in 2004), we ordinarily 

consider that you have engaged in 

substantial gainful activity. If your 

average monthly earnings from your 

work activity are equal to or less than 

the primary substantial gainful activity 

amount for the year(s) in which you 

work, the way we evaluate your work 

activity will generally depend on 

whether the work occurred in or after 

January 2001 or before January 2001. 

For work occurring between January 

1, 1990 and January 1, 2001, if your 

average monthly earnings from your 

work activity were less than $300, we 

generally consider that your earnings 

show that you have not engaged in 

substantial gainful activity. With certain 

exceptions, we generally do not 

consider other information beyond your 

earnings. We refer to this $300 earnings 

guideline as the secondary substantial 

gainful activity amount to distinguish it 

from the primary substantial gainful 

activity amount. If your earnings were 

between the primary ($700 per month 

for work occurring between July 1, 1999 

and January 1, 2001) and secondary 

substantial gainful activity levels, our 

rules provide that such earnings are 

neither high nor low enough to show 

whether you have engaged in 

substantial gainful activity. In these 

circumstances, we use separate criteria 

to evaluate your work as an employee to 

determine if you engaged in substantial 

gainful activity. If you worked in a 

sheltered workshop or comparable 

facility before January 1, 2001, earnings 

not greater than the primary substantial 

gainful activity amount ordinarily 

establish that the work was not 

substantial gainful activity. 

Beginning with January 2001, if your 

average monthly earnings are equal to or 

less than the primary substantial gainful 

activity amount, we generally consider 

that your earnings show that you have 

not engaged in substantial gainful 

activity. Except in certain 

circumstances, we generally do not 

consider other information in addition 

to your earnings. 

Therefore, if you worked from July 

2000 through June 2001, with earnings 

of $600 per month, we use separate 

criteria to determine if you engaged in 

substantial gainful activity. For work 

activity from January 2001 through June 

2001, your average monthly earnings are 

less than the primary substantial gainful 

activity amount ($740 per month for 

work occurring between January 1, 2001 

and January 1, 2002), we will generally 

consider that your earnings show that 

you have not engaged in substantial 

gainful activity. For work activity from 

July 2000 through December 2000, your 

earnings were between the primary 

($700 per month for work occurring 

between July 1, 1999 and January 1, 

2001) and secondary ($300 per month 

for work occurring between January 1, 

1990 and January 1, 2001) substantial 

gainful activity levels, your earnings are 

neither high nor low enough to show 

whether you have engaged in 

substantial gainful activity. We will use 

separate criteria, such as the work you 

did, the hours you worked, and the 

amount of assistance you received, to 

evaluate your work to determine if you 

engaged in substantial gainful activity. 

59002 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

1The other monthly insurance benefits based on 

disability under section 202 of the Act are: 

• Child’s insurance benfits based on disability 

under section 202(d); 

• Widow’s insurance benefits based on disability 

under section 202(e); and 

• Widower’s insurance benefits based on 

disability under section 202(f). 

Are earnings guidelines the only factor 

used to determine if your work as an 

employee is substantial gainful activity? 

As we have indicated above, in some 

instances, earnings guidelines are not 

the only factor we used to determine if 

the work you are performing is 

substantial gainful activity. In some 

cases we will consider other 

information if there is evidence which 

shows that you may have engaged in 

substantial gainful activity. In these 

instances, we evaluate your work 

activity under the criteria described 

below to determine if you have engaged 

in substantial gainful activity. We may 

determine that you have engaged in 

substantial gainful activity if your work 

activity satisfies either of the following 

set of criteria: 

• Your work is comparable to that of 

unimpaired people in your community 

who are doing the same or similar 

occupations as their means of 

livelihood, taking into account the time, 

energy, skill, and responsibility 

involved in the work; or 

• Your work, although significantly 

less than that done by unimpaired 

people, is clearly worth more than the 

substantial gainful activity amount, 

according to pay scales in your 

community. 

What factors are used to determine if 

your work as a self-employed person is 

substantial gainful activity? 

We consider your activities and their 

value to your business to decide 

whether you have engaged in 

substantial gainful activity. To 

determine whether you have engaged in 

substantial gainful activity, we apply 

three tests. If you have not engaged in 

substantial gainful activity under test 

one, then we will consider tests two and 

three. The tests are as follows: 

(1) Test One: You have engaged in 

substantial gainful activity if you render 

services that are significant to the 

operation of the business and receive a 

substantial income from the business. 

(See § 404.1575(b) and (c) for an 

explanation of what we mean by 

significant services and substantial 

income for purposes of this test.) 

(2) Test Two: You have engaged in 

substantial gainful activity if your work 

activity, in terms of factors such as 

hours, skills, energy output, efficiency, 

duties, and responsibilities, is 

comparable to that of unimpaired 

individuals in your community who are 

in the same or similar businesses as 

their means of livelihood. 

(3) Test Three: You have engaged in 

substantial gainful activity if your work 

activity, although not comparable to that 

of unimpaired individuals, is clearly 

worth more than the substantial gainful 

activity amount when considered in 

terms of its value to the business, or 

when compared to the salary that an 

owner would pay to an employee to do 

the work you are doing. 

What does section 221(m) of the Act 

provide? 

Section 221(m) contains two 

paragraphs. Paragraph (1) provides that, 

if you are entitled to disability 

insurance benefits under section 223 of 

the Act or to other monthly insurance 

benefits based on disability under 

section 202 of the Act,1 and you have 

received such benefits for at least 24 

months: 

• We may not schedule a continuing 

disability review for you solely as a 

result of your work activity (section 

221(m)(1)(A)); 

• We may not use your work activity 

as evidence that you are no longer 

disabled (section 221(m)(1)(B)); and 

• If you stop working, we may not 

presume that you are unable to work 

just because you stopped working 

(section 221(m)(1)(C)). 

Paragraph (2) explains that, if you are 

an individual described in paragraph 

(1): 

• You are still subject to regularly 

scheduled continuing disability reviews 

that are not triggered by work (section 

221(m)(2)(A)); and 

• We may still terminate your 

benefits if you have earnings that exceed 

the level of earnings that represent 

substantial gainful activity (section 

221(m)(2)(B)). 

What revisions are we proposing to 

make, and why? 

We propose to revise several of our 

rules in subparts J and P of part 404 and 

subparts I and N of part 416 of our 

regulations: 

• To explain that we will not start a 

continuing disability review based 

solely on your work activity if you are 

covered by section 221(m) of the Act; 

• To incorporate rules about not 

starting a continuing disability review 

that are contained in another part of our 

regulations and apply to you if you are 

using a ticket under the Ticket to Work 

program; 

• To explain how we consider 

activities from work in continuing 

disability reviews if you are covered by 

section 221(m); 

• To clarify how we determine 

continuing disability at the last two 

steps of the medical improvement 

review standard sequential evaluation 

process if you are not covered by section 

221(m); 

• To explain how we evaluate your 

work when we decide whether you have 

engaged in substantial gainful activity 

for purposes of determining whether 

your disability has ceased, if you are 

covered by section 221(m); 

• To explain that our action to start 

or to discontinue a continuing disability 

review is not an initial determination; 

and 

• To eliminate the use of the 

secondary substantial gainful activity 

amount for evaluating work done by an 

employee before January 2001. 

Although section 221(m) applies only 

if you receive disability benefits under 

title II of the Act, we are proposing 

changes in our title XVI regulations that 

would apply to you if: 

• You are entitled to Social Security 

disability benefits under title II of the 

Act; 

• You are subject to the provisions of 

section 221(m) because you have 

received the Social Security disability 

benefits for at least 24 months; and 

• You are also eligible for SSI benefits 

based on disability or blindness under 

title XVI of the Act. 

If you meet these criteria, we are 

proposing to use the same rules for 

starting continuing disability reviews 

under title XVI as we propose to use 

under title II. Also, when we do conduct 

a continuing disability review, we are 

proposing to use the same rules on how 

we consider the activities from your 

work in a continuing disability review 

under title XVI as we propose to use in 

a continuing disability review under 

title II. If we did not propose these 

changes to the title XVI regulations, we 

would have rules under which we could 

start a continuing disability review 

based solely on your work activity to 

determine whether your disability 

continues or ends under title XVI even 

though we could not start a continuing 

disability review on that basis to 

determine whether your disability 

continues or ends under title II. Also, 

when we do conduct continuing 

disability reviews for both title II and 

title XVI purposes, we would have 

different rules on how we consider the 

activities from your work for title II and 

title XVI purposes. As a result, we could 

determine that your disability continues 

under title II but that your disability has 

ended under title XVI. For these 

reasons, we are proposing the 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59003 

aforementioned changes to the title XVI 

regulations that would apply to you if 

you are a recipient of SSI benefits based 

on disability or blindness and also are 

a Social Security disability beneficiary 

who is covered by section 221(m) of the 

Act. We concluded that this is a 

reasonable interpretation of the statute 

and the most logical, equitable, and 

administratively efficient way to 

implement section 221(m) if you receive 

both types of benefits. 

We do not interpret section 221(m) of 

the Act to apply to you if you are a 

recipient of SSI benefits only. Section 

221(m) provides that, for you to be 

covered by that section, you must be 

entitled to and have received Social 

Security disability benefits under title II. 

Therefore, these proposed rules do not 

extend the provisions of section 221(m) 

to you if you receive only SSI disability 

or blindness payments. 

We are also proposing to include in 

our disability regulations rules that are 

already in subpart C of part 411 of our 

regulations and that apply to you if you 

are in the Ticket to Work program and 

using your ticket. These rules provide 

that we will not start a continuing 

disability review for you during the 

period in which you are using a ticket. 

However, they also explain that we can 

still do a review to determine if your 

disability has ended under title II 

because you have demonstrated your 

ability to engage in substantial gainful 

activity, as defined in §§ 404.1571–

404.1576 of our regulations. 

In these proposed rules, we are also 

clarifying that if you are entitled to 

Social Security disability benefits under 

title II or eligible for SSI disability 

payments under title XVI, we will not 

consider the work that you are doing or 

have done during your current period of 

entitlement or eligibility based on 

disability to be past relevant work or 

past work experience at the last two 

steps of the applicable medical 

improvement review standard 

sequential evaluation process. We are 

also proposing to provide a comparable 

rule if you are requesting expedited 

reinstatement of benefits under section 

223(i) or 1631(p) of the Act. The 

proposed rule would apply at the last 

two steps to work you do during or after 

your previous period of entitlement or 

eligibility which terminated and which 

is the basis for your request for 

expedited reinstatement. 

The following is an explanation of the 

specific changes we are proposing and 

our reasons for making these proposals. 

Sections 404.903 and 416.1403 

Administrative actions that are not 

initial determinations. We propose to 

add a new paragraph (x) to § 404.903 

and a new paragraph (a)(22) to 

§ 416.1403 to explain that the action of 

starting or discontinuing a continuing 

disability review is not an initial 

determination. As explained in existing 

§§ 404.903 and 416.1403(a), 

administrative actions that are not 

initial determinations may be reviewed 

by us, but they are not subject to the 

administrative review process provided 

by subpart J of part 404 or subpart N of 

part 416 of our regulations, and they are 

not subject to judicial review. If we start 

a continuing disability review based 

solely on your work activity, we will 

provide an opportunity for you to 

request that we review that action if you 

believe that you are protected by the 

section 221(m)(1)(A) provision and that 

the medical review should not have 

been started. We will inform you of this 

opportunity when we send you a letter 

telling you that we are starting a 

medical continuing disability review. If 

we review the action and conclude that 

the initiation of the continuing 

disability review was in error because 

section 221(m)(1)(A) of the Act applies, 

we will discontinue processing the 

continuing disability review. In 

addition, as we explain later in this 

preamble, if we process the continuing 

disability review to completion and 

make a medical cessation 

determination, we are proposing rules 

in §§ 404.1590 and 416.990 to provide a 

procedure under which we will vacate 

the medical cessation determination if, 

within a prescribed time period, we 

receive evidence from you that 

establishes that the start of your 

continuing disability review was in 

error because of section 221(m)(1)(A) of 

the Act. 

Sections 404.1574 and 416.974

Evaluation guides if you are an 

employee. We propose to revise 

§§ 404.1574(b) and 416.974(b) to remove 

the rules relating to the use of the 

secondary substantial gainful activity 

amount for evaluating work activity you 

performed as an employee prior to 

January 2001. This proposed change 

would eliminate the difference that 

exists between the way we evaluate 

work you performed as an employee 

before January 2001 and the way we 

evaluate work you performed as an 

employee in months beginning with 

January 2001 in cases in which your 

average monthly earnings from your 

work are equal to or less than the 

applicable primary substantial gainful 

activity amount. 

On December 29, 2000, we published 

final rules in the Federal Register (65 

FR 82905) to discontinue the use of a 

secondary substantial gainful activity 

amount effective for work activity in 

months beginning with January 2001. 

We made this change because, as we 

explained in the preamble to those final 

rules, ‘‘our experience suggests that the 

secondary substantial gainful activity 

amount has not been as useful a tool as 

we would have liked’’ (65 FR 82906). 

We indicated that our experience 

suggests that few applicants and 

beneficiaries would be affected by the 

change because few employees have 

been found to have performed 

substantial gainful activity on the basis 

of the secondary rules except in those 

circumstances that would otherwise 

warrant development of other 

information beyond earnings. We also 

explained that ‘‘[d]iscontinuing these 

complex secondary guidelines will help 

simplify our rules and facilitate public 

understanding of the Social Security 

disability program as well as improve 

our work efficiency’’ (65 FR 82906). For 

these same reasons, and to provide 

consistent rules for considering earnings 

from your work as an employee, without 

regard to whether the work was 

performed before January 2001 or in or 

after January 2001, we are proposing to 

discontinue the use of the secondary 

guidelines altogether. 

Under this proposed change, if your 

average monthly earnings from work 

you performed as an employee before 

January 2001 are equal to or less than 

the applicable primary substantial 

gainful activity amount, we will 

consider your earnings in the same way 

we consider earnings from work 

performed by an employee in or after 

January 2001 that do not average more 

than the applicable primary substantial 

gainful activity amount. That is, we will 

generally consider that your earnings 

from your work will show that you have 

not engaged in substantial gainful 

activity without considering other 

information beyond your earnings. We 

will perform additional development 

beyond looking at earnings only when 

circumstances indicate that you may 

have been engaging in substantial 

gainful activity or might have been in a 

position to control when earnings are 

paid to you or the amount of wages paid 

to you; (for example, if you are selfemployed or work for a small 

corporation run by a relative). 

Therefore, if you worked from July 2000 

through June 2001, with earnings of 

$600 per month, your average monthly 

earnings are less than the primary 

substantial gainful activity amount 

($740 per month for work occurring 

between January 1, 2001 and January 1, 

2002 and $700 per month for work 

occurring between July 1, 1999 and 

January 1, 2001), we will generally 

59004 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

consider that your earnings show that 

you have not engaged in substantial 

gainful activity. 

To make this change, we are 

proposing to eliminate the rules in 

§§ 404.1574(b) and 416.974(b) relating 

to the use of the secondary substantial 

gainful activity amount and the 

distinction between work performed 

before January 2001 and work 

performed in or after January 2001. We 

propose to replace existing paragraphs 

(b)(3) through (b)(6) of §§ 404.1574 and 

416.974 with a new paragraph (b)(3), 

Earnings that will ordinarily show that 

you have not engaged in substantial 

gainful activity. In proposed new 

paragraph (b)(3), we propose to 

consolidate our existing rules that apply 

in cases in which average monthly 

earnings from work performed by an 

employee (including work performed in 

a sheltered workshop or comparable 

facility) in or after January 2001 are 

equal to or less than the applicable 

primary substantial gainful activity 

amount, and to extend the scope of 

these rules to cover work performed 

before January 2001 as well as work 

performed in or after January 2001. 

In proposed new paragraph (b)(3)(i), 

General, we state the general rule. We 

explain that if your average monthly 

earnings are equal to or less than the 

amount(s) determined under paragraph 

(b)(2) of § 404.1574 or § 416.974 for the 

year(s) in which you work, we will 

generally consider that the earnings 

from your work activity as an employee 

(including earnings from work in a 

sheltered workshop or comparable 

facility) will show that you have not 

engaged in substantial gainful activity. 

We explain that we will generally not 

consider other information in addition 

to your earnings except in the 

circumstances described in proposed 

new paragraph (b)(3)(ii) of §§ 404.1574 

and 416.974. 

In proposed new paragraph (b)(3)(ii), 

When we will consider other 

information in addition to your 

earnings, we describe those 

circumstances in which we will 

ordinarily consider other information 

beyond your earnings. We explain that 

we will generally consider other 

information in addition to your earnings 

if there is evidence indicating that you 

may be engaging in substantial gainful 

activity or that you are in a position to 

control when earnings are paid to you 

or the amount of wages paid to you; (for 

example, if you are self-employed or 

working for a small corporation owned 

by a relative). 

We also include provisions in 

proposed new paragraph (b)(3)(ii) that 

provide examples of other information 

we may consider. These latter 

provisions incorporate the provisions of 

existing paragraph (b)(6)(iii) of 

§§ 404.1574 and 416.974. In proposed 

new paragraphs (b)(3)(ii)(A) and (B), we 

explain that other information we may 

consider includes, for example, 

whether; (A) your work is comparable to 

that of unimpaired people in your 

community who are doing the same or 

similar occupations as their means of 

livelihood, taking into account the time, 

energy, skill, and responsibility 

involved in the work; and (B) your 

work, although significantly less than 

that done by unimpaired people, is 

clearly worth the amounts shown in 

paragraph (b)(2) of § 404.1574 or 

§ 416.974, according to pay scales in 

your community. 

The provisions of proposed 

§§ 404.1574(b)(3)(i) and (ii) and 

416.974(b)(3)(i) and (ii) are based on the 

rules that are stated in the first sentence 

of existing paragraph (b)(3), the last 

sentence of existing paragraph (b)(4), 

existing paragraph (b)(5), and existing 

paragraphs (b)(6)(ii) and (iii) of 

§§ 404.1574 and 416.974. 

In addition, we propose to include 

certain provisions in proposed 

§ 404.1574(b)(3) that we are not 

including in proposed § 416.974(b)(3). 

In proposed § 404.1574(b)(3), we 

propose to include a paragraph 

(b)(3)(iii), Special rule for considering 

earnings alone when evaluating the 

work you do after you have received 

social security disability benefits for at 

least 24 months, to state a rule that may 

apply to you if you are covered by 

section 221(m) of the Act and you 

perform work as an employee. The rule 

in proposed § 404.1574(b)(3)(iii) 

provides an exception to the rule in 

proposed § 404.1574(b)(3)(ii), discussed 

above, which describes those 

circumstances in which we may 

consider other information in addition 

to your earnings, such as the 

comparability and value of services 

(proposed § 404.1574(b)(3)(ii)(A) and 

(B)). The exception would apply when 

we are evaluating the work that you 

perform while you are entitled to Social 

Security disability benefits and you 

have received such benefits for at least 

24 months. The exception would apply 

only if we are evaluating that work to 

decide whether the work shows that you 

are able to engage in substantial gainful 

activity for the purpose of determining 

whether your disability has ceased 

because of your work activity. In this 

case, even if the circumstances 

described in proposed 

§ 404.1574(b)(3)(ii) are present, we will 

not consider other information in 

addition to your earnings. Instead, we 

will apply the general rule described in 

proposed § 404.1574(b)(3)(i). That is, in 

the case described above, if your average 

monthly earnings from that work are 

equal to or less than the amount(s) 

determined under § 404.1574(b)(2) for 

the year(s) in which that work occurs, 

we will find that your earnings from 

that work will show that you have not 

engaged in substantial gainful activity. 

If you are entitled to Social Security 

disability benefits and you perform 

work as an employee after you have 

received such benefits for at least 24 

months, we interpret section 

221(m)(1)(B) of the Act to provide that 

we may not consider information about 

the activities you perform in that work 

(such as the information described in 

proposed § 404.1574(b)(3)(ii)(A) and (B)) 

to determine that the work shows that 

you are able to engage in substantial 

gainful activity and are, therefore, no 

longer disabled, i.e., that your disability 

has ceased. We may still consider your 

earnings from that work under the 

earnings guidelines to decide whether 

your earnings show that you have 

engaged in substantial gainful activity 

for the purpose of determining whether 

your disability has ceased. Also, we may 

still consider other information in 

addition to your earnings in the 

circumstances described in 

§ 404.1574(b)(3)(ii) to decide whether 

that work is substantial gainful activity 

for purposes other than the purpose of 

determining whether your disability has 

ceased. 

In proposed § 404.1574(b)(3)(iii), we 

explain that, even if the circumstances 

described in proposed 

§ 404.1574(b)(3)(ii) are present, we will 

not consider other information in 

addition to your earnings in evaluating 

the work you are doing or have done if: 

(A) at the time you do the work, you are 

entitled to Social Security disability 

benefits and you have received such 

benefits for at least 24 months; and (B) 

we are evaluating that work to consider 

whether you have engaged in 

substantial gainful activity or 

demonstrated the ability to engage in 

substantial gainful activity for the 

purpose of determining whether your 

disability has ceased because of your 

work activity. We include crossreferences to the sections of our 

regulations that concern making 

substantial gainful activity 

determinations for purposes of 

determining whether your disability has 

ceased. 

Also, in proposed § 404.1574(b)(3), we 

propose to include a paragraph 

(b)(3)(iv), When we consider you to have 

received social security disability 

benefits for at least 24 months. The 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59005 

provisions of proposed paragraph 

(b)(3)(iv) apply for purposes of proposed 

paragraph (b)(3)(iii) of § 404.1574. In 

proposed § 404.1574(b)(3)(iv), we 

provide a definition of Social Security 

disability benefits. We explain that we 

consider you to have received such 

benefits for at least 24 months beginning 

with the first day of the first month 

following the 24th month for which you 

received Social Security disability 

benefits that you were due. We state that 

the 24 months do not have to be 

consecutive. We explain that we do not 

count months for which you were 

entitled to benefits but for which you 

did not receive benefit payments, and 

we provide two examples. In addition, 

we explain that if you also receive SSI 

payments, months for which you 

received only SSI payments will not 

count for the 24-month requirement. 

We are including proposed new 

paragraphs (b)(3)(iii) and (iv) only in our 

proposed revision of § 404.1574(b). We 

are not including similar provisions in 

our proposed revision of § 416.974(b) 

because the performance of substantial 

gainful activity is not a basis for 

determining that disability has ceased 

under the SSI program. 

As we explain above, proposed new 

paragraph (b)(3) of §§ 404.1574 and 

416.974 would replace existing 

paragraphs (b)(3) through (b)(6) of these 

sections. As a consequence, we propose 

to make certain conforming changes to 

paragraphs (b)(1) and (2) of §§ 404.1574 

and 416.974. In paragraph (b)(1) of 

§§ 404.1574 and 416.974, we propose to 

remove references to paragraphs (b)(4), 

(5), and (6). In the introductory text of 

paragraph (b)(2) of §§ 404.1574 and 

416.974, we propose to revise the 

parenthetical phrase to read, 

‘‘(including earnings from work in a 

sheltered workshop or a comparable 

facility especially set up for severely 

impaired persons),’’ to incorporate the 

description of sheltered work contained 

in existing paragraph (b)(4) of these 

sections. 

Section 404.1575 Evaluation guides 

if you are self-employed. If you are 

covered by section 221(m) of the Act 

and you are self-employed, we propose 

to amend our rules in § 404.1575 to 

explain how we will evaluate your work 

activity when deciding whether you 

have engaged in substantial gainful 

activity following the completion of a 

trial work period for purposes of 

determining if your disability has 

ceased. (We are not proposing to amend 

our rules in § 416.975 because your 

performance of substantial gainful 

activity does not affect your disability 

status for purposes of your continuing 

eligibility for SSI payments.) As we 

explained earlier, if you are selfemployed, we consider three tests to 

determine if you have engaged in 

substantial gainful activity. Since the 

three tests require us to consider your 

activities at work and their value to your 

business, we decided that we could not 

use these tests to decide that the work 

you do after you have received Social 

Security disability benefits for at least 

24 months shows that you are able to 

engage in substantial gainful activity 

and are, therefore, no longer disabled. 

Based on section 221(m)(1)(B) of the 

Act, we concluded that we needed to 

provide a different test for considering 

whether that work is substantial gainful 

activity for purposes of determining 

whether your disability has ceased. 

Therefore, we are proposing to use a 

new evaluation test for that purpose. We 

refer to this new test as the countable 

income test. 

To explain this new evaluation test 

and when we will apply it, we propose 

to revise paragraphs (a) and (c) of 

§ 404.1575 and to add a new paragraph 

(e). We are retaining all of the 

provisions of existing paragraph (a). 

However, we are restructuring the 

paragraph. We propose to make the first 

two sentences of paragraph (a) the 

introductory text of that paragraph. (We 

propose to revise the first sentence of 

the paragraph to include a reference to 

proposed new paragraph (e).) We 

propose to include the remaining 

provisions of paragraph (a) in a new 

paragraph (a)(2), General rules for 

evaluating your work activity if you are 

self-employed. Because of this change, 

existing paragraphs (a)(1), (2), and (3) of 

§ 404.1575 would be redesignated 

paragraphs (a)(2)(i), (ii), and (iii), 

respectively. 

Following the first two sentences of 

paragraph (a) of § 404.1575, we propose 

to add a new paragraph (a)(1), How we 

evaluate the work you do after you have 

become entitled to disability benefits. In 

proposed § 404.1575(a)(1), we explain 

which rules we will use to evaluate your 

work activity if you are self-employed 

and you perform the work activity while 

you are entitled to Social Security 

disability benefits. (We explain that 

Social Security disability benefits means 

disability insurance benefits for a 

disabled worker, child’s insurance 

benefits based on disability, or widow’s 

or widower’s insurance benefits based 

on disability.) We explain that the way 

we will evaluate your work activity will 

depend on whether the work occurs 

before or after you have received Social 

Security disability benefits for at least 

24 months and on the purpose of the 

evaluation. We explain in 

§ 404.1575(a)(1) that we will use the 

guides in proposed paragraph (e), which 

provide for the use of the countable 

income test, to evaluate the work 

activity you do after you have received 

such benefits for at least 24 months to 

determine whether you have engaged in 

substantial gainful activity for the 

purpose of determining whether your 

disability has ceased. In all other cases 

in which we evaluate your work activity 

as a self-employed person to make a 

substantial gainful activity 

determination, we will apply the guides 

in proposed § 404.1575(a)(2). Proposed 

§ 404.1575(a)(2) sets out the three tests 

we currently use to evaluate the work of 

a self-employed person. 

We explain in proposed 

§ 404.1575(a)(1) that we will use the 

three tests described in proposed 

§ 404.1575(a)(2) to evaluate the work 

activity you do before you have received 

Social Security disability benefits for 24 

months to determine if you have 

engaged in substantial gainful activity, 

regardless of the purpose of the 

evaluation. We also explain that, after 

we have determined that your disability 

has ceased during the reentitlement 

period because you performed 

substantial gainful activity, we will use 

the three tests to determine whether you 

are doing substantial gainful activity in 

subsequent months in or after your 

reentitlement period, whether your 

work activity occurs before or after you 

have received Social Security disability 

benefits for at least 24 months. After we 

have determined that your disability has 

ceased due to the performance of 

substantial gainful activity during the 

reentitlement period, we make 

substantial gainful activity 

determinations to decide whether 

benefits should be started or stopped for 

a subsequent month(s) during the 

reentitlement period and to decide 

when your entitlement to benefits 

terminates (see § 404.1592a(a)(2) and 

(3)). We may use the three tests that 

involve looking at work activity in 

making these substantial gainful activity 

determinations because these 

determinations do not involve deciding 

that you are no longer disabled. 

We propose to revise § 404.1575(c). In 

proposed 404.1575(c)(1), Determining 

countable income, we explain what 

deductions are applied to your net 

income to decide the amount of your 

income we use to determine if you have 

done substantial gainful activity. We 

explain that we refer to this amount as 

your countable income. In proposed 

§ 404.1575(c)(2), we explain when we 

consider your countable income to be 

substantial. 

In proposed § 404.1575(e), Special 

rules for evaluating the work you do 

59006 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

after you have received social security 

disability benefits for at least 24 months, 

we explain the countable income test 

and when it applies. We explain that we 

will apply this test to evaluate the work 

you are doing or have done if, at the 

time you perform the work, you are 

entitled to Social Security disability 

benefits and you have received such 

benefits for at least 24 months. We 

explain that we will apply the test only 

when we are evaluating that work to 

consider whether you have engaged in 

substantial gainful activity or 

demonstrated the ability to engage in 

substantial gainful activity for the 

purpose of determining whether your 

disability has ceased because of your 

work activity. We explain that, under 

the countable income test, we will not 

consider the services you perform in 

that work to determine that the work 

you are doing shows that you are able 

to engage in substantial gainful activity 

and are, therefore, no longer disabled. 

However, we may consider the services 

you perform to determine that you are 

not doing substantial gainful activity. 

In proposed paragraph (e)(2), The 24- 

month requirement, we explain that we 

consider you to have received Social 

Security disability benefits for at least 

24 months beginning with the first day 

of the first month following the 24th 

month for which you received Social 

Security disability benefits that you 

were due. We provide examples of 

months that do not count toward the 24- 

month requirement. 

We explain the new evaluation test in 

proposed (e)(3), The countable income 

test. Under the countable income test, 

we will compare your countable income 

to the substantial gainful activity 

earnings guidelines in § 404.1574(b)(2) 

to determine if you have engaged in 

substantial gainful activity. We will 

consider that you have engaged in 

substantial gainful activity if your 

monthly countable income averages 

more than the amounts in 

§ 404.1574(b)(2) unless the evidence 

shows that you did not render 

significant services in the month(s). If 

your average monthly countable income 

is equal to or less than the amounts in 

§ 404.1574(b)(2), or if the evidence 

shows that you did not render 

significant services, we will consider 

that your work as a self-employed 

person shows that you have not engaged 

in substantial gainful activity. 

Sections 404.1590 and 416.990

When and how often we will conduct a 

continuing disability review. We 

propose to add two new paragraphs to 

these sections to explain when we will 

and will not start continuing disability 

reviews if you are in the Ticket to Work 

program and your ticket is in use 

(proposed paragraph (h)), and if you are 

covered by the provisions of section 

221(m) of the Act (proposed paragraph 

(i)). 

In proposed §§ 404.1590(h) and 

416.990(h), If you are participating in 

the Ticket to Work program, we restate 

our rules already set out in §§ 411.160 

and 411.165 that we will not start a 

continuing disability review for you 

during the period in which you are 

using a ticket under the Ticket to Work 

program. This proposed amendment to 

§§ 404.1590 and 416.990 is not a change 

in policy, but incorporates rules already 

set out in §§ 411.160 and 411.165. In 

addition, we provide in proposed 

§ 404.1590(h) that this provision does 

not apply to the reviews we do under 

title II using the rules in §§ 404.1571–

404.1576 to determine whether the work 

you have done shows that you are able 

to do substantial gainful activity (see 

§ 411.160(b)). (As we have already 

noted, your performance of substantial 

gainful activity does not affect your SSI 

eligibility because of the work incentive 

provisions of section 1619 of the Act.) 

In proposed §§ 404.1590(i) and 

416.990(i), If you are working and have 

received social security disability 

benefits for at least 24 months, we 

provide rules for you if you are covered 

by section 221(m) of the Act. In 

proposed paragraph (i)(1), General, we 

explain that we will not start a 

continuing disability review based 

solely on your work activity if you are 

currently entitled to benefits based on 

disability under title II of the Act and 

you have received such benefits for at 

least 24 months. We also list the types 

of title II disability benefits that qualify. 

Although section 221(m)(1)(A) says 

that a continuing disability review may 

not be ‘‘scheduled’’ based solely on your 

work activity, we propose to use the 

word ‘‘start’’ in this provision and the 

remainder of proposed paragraph (i) of 

§§ 404.1590 and 416.990 to avoid any 

confusion about what we will do, and 

to use consistent language throughout 

these sections of our rules. Existing 

provisions in §§ 404.1590 and 416.990 

use both words. We use the word ‘‘start’’

in the opening sentence of current 

§§ 404.1590(b) and 416.990(b) to explain 

when we will do a continuing disability 

review. We then use the word 

‘‘scheduled’’ in current paragraphs 

(b)(1), (b)(2) and (b)(10) to explain when 

we will start a continuing disability 

review that we have scheduled in 

advance; that is, based on a diary for 

‘‘medical improvement expected,’’

‘‘medical improvement possible,’’ or 

‘‘medical improvement not expected,’’

or on a ‘‘vocational reexamination 

diary.’’ In current paragraph (b)(11) of 

§ 416.990, we specify a timeframe 

within which we must review the cases 

of certain children (i.e., by the first 

birthday of the child) unless certain 

conditions are met. In current paragraph 

(b)(11)(ii) of § 416.990, which discusses 

one of the conditions, we use the word 

‘‘schedule’’ to describe a situation in 

which we set a time in advance for 

conducting a continuing disability 

review. The remaining provisions in 

current paragraphs (b)(3)–(b)(9) of 

§§ 404.1590 and 416.990 describe 

situations in which we do not schedule 

continuing disability reviews in 

advance but may start them sooner than 

the regularly scheduled reviews. 

In proposed §§ 404.1590(i)(2) and 

416.990(i)(2), The 24-month 

requirement, we provide rules for 

determining whether the 24-month 

requirement in proposed 

§§ 404.1590(i)(1) and 416.990(i)(1) is 

met. In proposed paragraph (i)(2)(i), we 

explain that months for which you have 

actually received Social Security 

disability benefit payments under title II 

that you were due will be counted for 

the 24-month requirement. The 24 

months do not have to be consecutive. 

We also explain that we do not include 

months for which you were technically 

‘‘entitled’’ but did not receive benefit 

payments, and provide two examples. In 

addition, we clarify that months for 

which you received only SSI payments 

and months for which you received 

continued benefits pending the appeal 

of a medical cessation determination, do 

not count toward the 24-month 

requirement. 

In proposed §§ 404.1590(i)(2)(ii) and 

416.990(i)(2)(ii), we explain that you 

will not meet the 24-month requirement 

for purposes of proposed 

§ 404.1590(i)(1) or § 416.990(i)(1) if you 

have not received Social Security 

disability benefits for at least 24 months 

as of the date on which we start a 

continuing disability review. We 

explain that the date on which we start 

a continuing disability review is the 

date on the notice we send you that tells 

you that we are beginning the review. 

In proposed §§ 404.1590(i)(3) and 

416.990(i)(3), When we may start a 

continuing disability review even if you 

have received social security disability 

benefits for at least 24 months, we 

include a reminder that, even if you 

meet the requirements of proposed 

paragraph (i)(1) of § 404.1590 or 

§ 416.990, we may still start a 

continuing disability review if we have 

another reason to do so; that is, when 

the fact that you are working is not the 

sole reason for the continuing disability 

review. We include two examples, 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59007 

including a reminder that we must still 

schedule you for regularly scheduled 

continuing disability reviews, as 

provided under section 221(m)(2)(A) of 

the Act. 

In § 404.1590, we propose to include 

a paragraph (i)(4), Reviews to determine 

whether the work you have done shows 

that you are able to do substantial 

gainful activity, to clarify that the 

exemption from continuing disability 

reviews in proposed paragraph (i)(1) of 

that section does not apply to certain 

reviews we conduct under title II of the 

Act. We explain that proposed 

paragraph (i)(1) does not apply to the 

reviews we conduct using the rules in 

§§ 404.1571–404.1576 to determine 

whether the work you have done shows 

that you are able to do substantial 

gainful activity and are, therefore, no 

longer disabled. We do not conduct 

similar reviews under title XVI because 

of the work incentive provisions in 

section 1619 of the Act. Therefore, we 

do not include a similar provision in the 

proposed amendments to § 416.990. 

As we explain earlier in this 

preamble, if we start a continuing 

disability review based on your work 

activity, we will provide an opportunity 

for you to request that we review that 

action if you believe that you are 

protected by section 221(m)(1)(A) of the 

Act and that the action of starting the 

continuing disability review was in 

error. If we review the action and 

conclude that the initiation of the 

medical continuing disability review 

was in error, we will discontinue the 

processing of the continuing disability 

review. If the continuing disability 

review proceeds to completion and we 

make a medical cessation 

determination, we are proposing rules 

in §§ 404.1590(i)(5) and 416.990(i)(4) to 

provide a procedure under which we 

will vacate the medical cessation 

determination if the action of starting 

the continuing disability review is 

shown to have been in error because 

you were protected by section 

221(m)(1)(A). You must provide 

evidence to us that establishes that you 

met the requirements of proposed 

§ 404.1590(i)(1) or § 416.990(i)(1) as of 

the date of the start of your continuing 

disability review and that the start of the 

review was erroneous. In addition, we 

must receive the evidence within 12 

months of the date of the notice of the 

initial determination of medical 

cessation. 

We also propose to amend paragraph 

(a) of §§ 404.1590 and 416.990 to 

include references to proposed new 

paragraphs (h) and (i) of these sections. 

Section 404.1592a The reentitlement 

period. We propose to amend paragraph 

(a) of § 404.1592a to explain when the 

special rules in proposed 

§§ 404.1574(b)(3)(iii) and 404.1575(e) 

may apply, and when they will not 

apply, in making substantial gainful 

activity determinations. We also 

propose to revise paragraph (a)(3) of 

§ 404.1592a to separate the provisions 

into two lower level paragraphs. We 

propose to designate the second, third, 

and fourth sentences of paragraph (a)(3) 

as paragraph (a)(3)(i). We propose to 

designate the fifth, sixth, and seventh 

sentences of paragraph (a)(3) as 

paragraph (a)(3)(ii). 

We propose to amend paragraph (a)(1) 

of § 404.1592a to include a reference to 

the special rules for evaluating the work 

you do after you have received Social 

Security disability benefits for at least 

24 months. We are including this 

reference in the list of examples of the 

relevant rules we will apply when 

deciding whether the work you do 

following completion of a trial work 

period is substantial gainful activity for 

purposes of determining whether your 

disability has ceased. We are proposing 

to make a similar change in newly 

designated paragraph (a)(3)(ii). 

We propose to revise the last sentence 

of paragraph (a)(2)(i) of this section to 

clarify that, if we have decided that your 

disability ceased during the 

reentitlement period because you 

performed substantial gainful activity, 

we will not apply the special rules in 

proposed §§ 404.1574(b)(3)(iii) and 

404.1575(e) in making substantial 

gainful activity determinations for 

purposes of determining whether 

benefits should be paid for any 

particular months in the reentitlement 

period. We propose to make a similar 

change in newly designated paragraph 

(a)(3)(i) to indicate that, if we have 

decided that your disability ceased 

during the reentitlement period based 

on your work activity, we will not apply 

the special rules in proposed 

§§ 404.1574(b)(3)(iii) and 404.1575(e) 

when deciding whether you engaged in 

substantial gainful activity following the 

reentitlement period for purposes of 

determining whether your entitlement 

to benefits has terminated. The special 

rules in proposed §§ 404.1574(b)(3)(iii) 

and 404.1575(e) do not apply in making 

these substantial gainful activity 

determinations because these 

determinations do not involve deciding 

whether your disability has ceased. 

Section 404.1594 How we will 

determine whether your disability 

continues or ends. 

Section 416.994 How we will 

determine whether your disability 

continues or ends, disabled adults. We 

propose to add new § 404.1594(i), If you 

work during your current period of 

entitlement based on disability or 

during certain other periods, and new 

§ 416.994(b)(8), If you work during your 

current period of eligibility based on 

disability or during certain other 

periods, to: 

• Incorporate a longstanding 

instruction we have that interprets our 

regulations on the medical improvement 

review standard; 

• Explain how we will consider the 

activities you do in your work if you are 

covered by section 221(m) of the Act; 

• Explain how we will consider the 

activities you do in your work if you are 

not covered by section 221(m) of the 

Act; and 

• Explain how we will consider the 

activities you perform in work when 

determining whether you are entitled to 

expedited reinstatement of benefits 

under sections 221(i) or eligible for 

expedited reinstatement of benefits 

under 1631(p) of the Act. 

In proposed §§ 404.1594(i)(1) and 

416.994(b)(8)(i), we propose to clarify 

our rules about the last two steps of the 

medical improvement review standard 

sequential evaluation process for 

determining whether disability 

continues or ends to reflect an 

interpretation contained in an operating 

instruction we have been using for a 

number of years. The proposed 

provisions clarify that we will not 

consider work you are doing now, or 

work that you did, during your current 

period of entitlement based on disability 

under title II (proposed § 404.1594(i)(1)), 

or during your current period of 

eligibility based on disability under title 

XVI (proposed § 416.994(b)(8)(i)), to be 

past relevant work for purposes of the 

second to last step of the sequential 

evaluation processes described in 

§§ 404.1594(f) and 416.994(b)(5). The 

proposed provisions also explain that 

we will not consider such work to be 

‘‘past work experience’’ when we decide 

whether you can do other work at the 

last step of those processes. In these 

provisions of the proposed rules, we 

also propose to provide that we will not 

consider certain work to be past relevant 

work or past work experience for 

purposes of the last two steps of the 

medical improvement review standard 

sequential evaluation process when we 

decide whether you qualify for 

expedited reinstatement of benefits 

under section 223(i) or 1631(p) of the 

Act. For purposes of deciding whether 

you qualify for expedited reinstatement 

of benefits, the proposed rules would 

apply to work you are doing or have 

done during or after your previous 

period of entitlement or eligibility 

which terminated and which is the basis 

59008 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

for your request for expedited 

reinstatement. We published final rules 

regarding the expedited reinstatement 

provisions in the Federal Register on 

September 30, 2005 (70 FR 57132). 

Those rules do not discuss the specific 

issue we are addressing here. 

In proposed §§ 404.1594(i)(2) and 

416.994(b)(8)(ii), we provide rules for 

you if you are covered by section 221(m) 

of the Act. Section 221(m)(1)(B) of the 

Act explains that if you are covered by 

this section, ‘‘no work activity engaged 

in by the individual may be used as 

evidence that the individual is no longer 

disabled.’’ Based on this statutory 

language, we provide in the proposed 

rules that we will not consider the 

activities you do in your work if they 

support a finding that you are no longer 

disabled. We may still find that you are 

no longer disabled, but only if that 

finding is based on other evidence. 

We also provide that we may consider 

the activities you do in your work if 

they provide evidence that you are still 

disabled or if they do not conflict with 

a finding that you are still disabled. 

Your functioning on the job may help us 

to establish that you are still disabled. 

We concluded that we are required to 

include this provision because the 

language of section 221(m)(1)(B) speaks 

only about the use of work activity as 

evidence that an individual is ‘‘no 

longer disabled.’’

We also propose to include in 

§§ 404.1594(i)(2) and 416.994(b)(8)(ii) a 

statement that we will not presume that 

you are still disabled if you stop 

working. This would incorporate the 

statutory requirement of section 

221(m)(1)(C) into our regulations. 

In proposed §§ 404.1594(i)(3) and 

416.994(b)(8)(iii), we explain how we 

consider activities from work in all 

other continuing disability reviews; that 

is, if you receive disability benefits 

under title II but are not covered by 

section 221(m) or if you are eligible only 

for SSI benefits. The proposed rules 

would only incorporate into our 

regulations an interpretation we already 

use. Even though we may not consider 

the work that you do during your 

current period of entitlement or 

eligibility based on disability to be past 

relevant work or past work experience, 

we do consider the physical and mental 

activities you do in your work when we 

need to assess your functioning (for 

example, when we assess your residual 

functional capacity) in deciding 

whether your disability continues or 

ends. We consider the activities 

regardless of whether they support a 

finding that your disability continues or 

support a finding that your disability 

has ended. (It is only when you are 

covered by section 221(m) that we 

would not consider the activities if they 

support a finding that your disability 

has ended, as explained in proposed 

§§ 404.1594(i)(2) and 416.994(b)(8)(ii), 

discussed above.) In proposed 

§§ 404.1594(i)(3) and 416.994(b)(8)(iii), 

therefore, we are only proposing to 

codify in our regulations our current 

practice when you are not covered by 

section 221(m). 

We concluded that we are required to 

do this in these cases, because of the 

general requirements of the Act and our 

regulations that we consider all of the 

relevant evidence in your case record 

whenever we make a determination 

about your disability. Section 221(m) 

provides an explicit exception to this 

rule, but only for people who are 

covered by that section. 

We are aware that the proposed 

provisions in §§ 404.1594(i)(2) and 

416.994(b)(8)(ii) may create a more 

complex process because we may, in 

some cases, be required to disregard 

information about your work that would 

otherwise be evidence about your 

physical and mental abilities. We may 

also be required to undertake additional 

development to obtain alternative 

evidence about your abilities, or to 

clarify evidence (such as medical 

opinion evidence) that may have been 

based on information about your 

activities at work. We are also aware 

that these proposed provisions may be 

too complex for you to understand. 

However, we concluded that there is no 

other permissible interpretation of the 

language of section 221(m)(1)(B). 

We are also adding cross-references in 

several places in §§ 404.1594 and 

416.994 as a reminder to consider the 

provisions in proposed §§ 404.1594(i) 

and 416.994(b)(8) whenever 

appropriate. 

Other changes. We propose to make a 

few minor editorial corrections and 

revisions to existing provisions. These 

changes are not substantive and we do 

not intend to change the meaning of 

existing rules in any way by them. For 

example, we propose to provide 

paragraph designations for some of the 

clauses within §§ 404.1590(b) and 

416.990(b) to make them easier to refer 

to. We are also deleting the reference to 

completion of a trial work period from 

§ 416.990(b)(4). There are no trial work 

periods under title XVI because of other 

work incentive provisions in the Act. 

When we last revised our regulations to 

remove references to the trial work 

period from the SSI regulations, we 

inadvertently overlooked this provision. 

See 65 FR 42772, 42775 (July 11, 2000). 

In addition, we are replacing the word 

‘‘decide’’ with the word ‘‘determine’’ in 

the heading of § 416.994 to conform to 

the language used in the headings of 

§§ 404.1594 and 416.994a. 

Clarity of These Proposed Rules. 

Executive Order 12866, as amended by 

Executive Order 13258, requires each 

agency to write all rules in plain 

language. In addition to your 

substantive comments on these 

proposed rules, we invite your 

comments on how to make them easier 

to understand. 

For example: 

• Have we organized the material to 

suit your needs? 

• Are the requirements in the rules 

clearly stated? 

• Do the rules contain technical 

language or jargon that isn’t clear? 

• Would a different format (grouping 

and order of sections, use of headings, 

paragraphing) make the rules easier to 

understand? 

• Would more (but shorter) sections 

be better? 

• Could we improve clarity by adding 

tables, lists, or diagrams? 

• What else could we do to make the 

rules easier to understand? 

Regulatory Procedures 

Executive Order 12866 

We have consulted with the Office of 

Management and Budget (OMB) and 

determined that these proposed rules 

meet the criteria for a significant 

regulatory action under Executive Order 

12866, as amended by Executive Order 

13258. Thus, they were subject to OMB 

review. 

Regulatory Flexibility Act 

We certify that these proposed 

regulations would not have a significant 

economic impact on a substantial 

number of small entities because they 

affect only individuals. Thus, a 

regulatory flexibility analysis as 

provided in the Regulatory Flexibility 

Act, as amended, is not required. 

Paperwork Reduction Act 

These proposed regulations impose 

no reporting or recordkeeping 

requirements that require OMB 

clearance. 

(Catalog of Federal Domestic Assistance 

Program Nos. 96.001, Social Security—

Disability Insurance; 96.002, Social 

Security—Retirement Insurance; 96.004, 

Social Security—Survivors Insurance; 

96.006, Supplemental Security Income) 

List of Subjects 

20 CFR Part 404 

Administrative practice and 

procedure, Blind, Disability benefits, 

Old-Age, Survivors and Disability 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59009 

Insurance, Reporting and recordkeeping 

requirements, Social Security, 

Vocational rehabilitation. 

20 CFR Part 416 

Administrative practice and 

procedure, Aged, Blind, Disability 

benefits, Public assistance programs, 

Reporting and recordkeeping 

requirements, Supplemental Security 

Income (SSI), Vocational rehabilitation. 

Dated: October 3, 2005. 

Jo Anne B. Barnhart, 

Commissioner of Social Security. 

For the reasons set out in the 

preamble, we propose to amend 

subparts J and P of part 404 and 

subparts I and N of part 416 of chapter 

III of title 20 of the Code of Federal 

Regulations as set forth below: 

PART 404—FEDERAL OLD-AGE, 

SURVIVORS AND DISABILITY 

INSURANCE (1950– ) 

Subpart J—Determinations, 

Administrative Review Process, and 

Reopening of Determinations and 

Decisions 

1. The authority citation for subpart J 

continues to read as follows: 

Authority: Secs. 201(j), 204(f), 205(a), (b), 

(d)–(h), and (j), 221, 225, and 702(a)(5) of the 

Social Security Act (42 U.S.C. 401(j), 404(f), 

405(a), (b), (d)–(h), and (j), 421, 425, and 

902(a)(5)); sec. 5, Pub. L. 97–455, 96 Stat. 

2500 (42 U.S.C. 405 note); secs. 5, 6(c)–(e), 

and 15, Pub. L. 98–460, 98 Stat. 1802 (42 

U.S.C. 421 note). 

2. Section 404.903 is amended by 

removing the word ‘‘and’’ at the end of 

paragraph (v), replacing the period at 

the end of paragraph (w) with ‘‘; and’’, 

and adding a new paragraph (x) to read 

as follows: 

§ 404.903 Administrative actions that are 

not initial determinations. 

* * * * * 

(x) Starting or discontinuing a 

continuing disability review. 

Subpart P—Determining Disability and 

Blindness 

3. The authority citation for subpart P 

is revised to read as follows: 

Authority: Secs. 202, 205(a), (b), and (d)–

(h), 216(i), 221(a), (i), and (m), 222(c), 223, 

225, and 702(a)(5) of the Social Security Act 

(42 U.S.C. 402, 405(a), (b), and (d)–(h), 416(i), 

421(a), (i), and (m), 422(c), 423, 425, and 

902(a)(5)); sec. 211(b), Pub. L. 104–193, 110 

Stat. 2105, 2189. 

4. Section 404.1574 is amended by 

revising paragraph (b) to read as follows: 

§ 404.1574 Evaluation guides if you are an 

employee. 

* * * * * 

(b) Earnings guidelines. (1) General. If 

you are an employee, we first consider 

the criteria in paragraph (a) of this 

section and § 404.1576, and then the 

guides in paragraphs (b)(2) and (3) of 

this section. When we review your 

earnings to determine if you have been 

performing substantial gainful activity, 

we will subtract the value of any 

subsidized earnings (see paragraph 

(a)(2) of this section) and the reasonable 

cost of any impairment-related work 

expenses from your gross earnings (see 

§ 404.1576). The resulting amount is the 

amount we use to determine if you have 

done substantial gainful activity. We 

will generally average your earnings for 

comparison with the earnings 

guidelines in paragraphs (b)(2) and (3) 

of this section. See § 404.1574a for our 

rules on averaging earnings. 

(2) Earnings that will ordinarily show 

that you have engaged in substantial 

gainful activity. We will consider that 

your earnings from your work activity as 

an employee (including earnings from 

work in a sheltered workshop or a 

comparable facility especially set up for 

severely impaired persons) show that 

you engaged in substantial gainful 

activity if: 

(i) Before January 1, 2001, they 

averaged more than the amount(s) in 

Table 1 of this section for the time(s) in 

which you worked. 

(ii) Beginning January 1, 2001, and 

each year thereafter, they average more 

than the larger of: 

(A) The amount for the previous year, 

or 

(B) An amount adjusted for national 

wage growth, calculated by multiplying 

$700 by the ratio of the national average 

wage index for the year 2 calendar years 

before the year for which the amount is 

being calculated to the national average 

wage index for the year 1998. We will 

then round the resulting amount to the 

next higher multiple of $10 where such 

amount is a multiple of $5 but not of 

$10 and to the nearest multiple of $10 

in any other case. 

TABLE 1 

For months: 

Your monthly 

earnings 

averaged 

more than: 

In calendar years before 

1976 .................................. $200 

In calendar year 1976 .......... 230 

In calendar year 1977 .......... 240 

In calendar year 1978 .......... 260 

In calendar year 1979 .......... 280 

In calendar years 1980–1989 300 

TABLE 1—Continued 

For months: 

Your monthly 

earnings 

averaged 

more than: 

January 1990–June 1999 ..... 500 

July 1999–December 2000 .. 700 

(3) Earnings that will ordinarily show 

that you have not engaged in substantial 

gainful activity. (i) General. If your 

average monthly earnings are equal to or 

less than the amount(s) determined 

under paragraph (b)(2) of this section for 

the year(s) in which you work, we will 

generally consider that the earnings 

from your work as an employee 

(including earnings from work in a 

sheltered workshop or comparable 

facility) will show that you have not 

engaged in substantial gainful activity. 

We will generally not consider other 

information in addition to your earnings 

except in the circumstances described 

in paragraph (b)(3)(ii) of this section. 

(ii) When we will consider other 

information in addition to your 

earnings. We will generally consider 

other information in addition to your 

earnings if there is evidence indicating 

that you may be engaging in substantial 

gainful activity or that you are in a 

position to defer or suppress your 

earnings. (See paragraph (b)(3)(iii) of 

this section for when we do not apply 

this rule.) Examples of other 

information we may consider include, 

whether—

(A) Your work is comparable to that 

of unimpaired people in your 

community who are doing the same or 

similar occupations as their means of 

livelihood, taking into account the time, 

energy, skill, and responsibility 

involved in the work; and 

(B) Your work, although significantly 

less than that done by unimpaired 

people, is clearly worth the amounts 

shown in paragraph (b)(2) of this 

section, according to pay scales in your 

community. 

(iii) Special rule for considering 

earnings alone when evaluating the 

work you do after you have received 

social security disability benefits for at 

least 24 months. Notwithstanding 

paragraph (b)(3)(ii) of this section, we 

will not consider other information in 

addition to your earnings to evaluate the 

work you are doing or have done if—

(A) At the time you do the work, you 

are entitled to social security disability 

benefits and you have received such 

benefits for at least 24 months (see 

paragraph (b)(3)(iv) of this section); and 

(B) We are evaluating that work to 

consider whether you have engaged in 

substantial gainful activity or 

59010 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

demonstrated the ability to engage in 

substantial gainful activity for the 

purpose of determining whether your 

disability has ceased because of your 

work activity (see §§ 404.1592a(a)(1) 

and (3)(ii) and 404.1594(d)(5) and (f)(1)). 

(iv) When we consider you to have 

received social security disability 

benefits for at least 24 months. For 

purposes of paragraph (b)(3)(iii) of this 

section, social security disability 

benefits means disability insurance 

benefits for a disabled worker, child’s 

insurance benefits based on disability, 

or widow’s or widower’s insurance 

benefits based on disability. We 

consider you to have received such 

benefits for at least 24 months beginning 

with the first day of the first month 

following the 24th month for which you 

received social security disability 

benefits that you were due. The 24 

months do not have to be consecutive. 

Any months for which you were 

entitled to benefits but for which you 

did not receive a benefit payment will 

not be counted for the 24-month 

requirement; for example, a month for 

which you did not receive a benefit 

payment because of worker’s 

compensation offset or because you 

repaid an overpayment to us. If you also 

receive supplemental security income 

payments based on disability or 

blindness under title XVI of the Social 

Security Act, months for which you 

received only supplemental security 

income payments will not be counted 

for the 24-month requirement. 

* * * * * 

5. Section 404.1575 is amended by 

revising paragraphs (a) and (c) and 

adding new paragraph (e) to read as 

follows: 

§ 404.1575 Evaluation guides if you are 

self-employed. 

(a) If you are a self-employed person. 

If you are working or have worked as a 

self-employed person, we will use the 

provisions in paragraphs (a) through (e) 

of this section that are relevant to your 

work activity. We will use these 

provisions whenever they are 

appropriate, whether in connection with 

your application for disability benefits 

(when we make an initial determination 

on your application and throughout any 

appeals you may request), after you 

have become entitled to a period of 

disability or to disability benefits, or 

both. 

(1) How we evaluate the work you do 

after you have become entitled to 

disability benefits. If you are entitled to 

social security disability benefits and 

you work as a self-employed person, the 

way we will evaluate your work activity 

will depend on whether the work 

activity occurs before or after you have 

received such benefits for at least 24 

months and on the purpose of the 

evaluation. For purposes of paragraphs 

(a) and (e) of this section, social security 

disability benefits means disability 

insurance benefits for a disabled worker, 

child’s insurance benefits based on 

disability, or widow’s or widower’s 

insurance benefits based on disability. 

We will use the rules in paragraph (e)(2) 

of this section to determine if you have 

received such benefits for at least 24 

months. 

(i) We will use the guides in 

paragraph (a)(2) of this section to 

evaluate any work activity you do before 

you have received social security 

disability benefits for at least 24 months 

to determine whether you have engaged 

in substantial gainful activity, regardless 

of the purpose of the evaluation. 

(ii) We will use the guides in 

paragraph (e) of this section to evaluate 

any work activity you do after you have 

received social security disability 

benefits for at least 24 months to 

determine whether you have engaged in 

substantial gainful activity for the 

purpose of determining whether your 

disability has ceased because of your 

work activity. 

(iii) If we have determined under 

§ 404.1592a(a)(1) that your disability 

ceased in a month during the 

reentitlement period because you 

performed substantial gainful activity, 

and we need to decide under 

§ 404.1592a(a)(2)(i) or (a)(3)(i) whether 

you are doing substantial gainful 

activity in a subsequent month in or 

after your reentitlement period, we will 

use the guides in paragraph (a)(2) of this 

section (subject to the limitations 

described in § 404.1592a(a)(2)(i) and 

(a)(3)(i)) to determine whether your 

work activity in that month is 

substantial gainful activity. We will use 

the guides in paragraph (a)(2) of this 

section for these purposes, regardless of 

whether your work activity in that 

month occurs before or after you have 

received social security disability 

benefits for at least 24 months. 

(2) General rules for evaluating your 

work activity if you are self-employed. 

We will consider your activities and 

their value to your business to decide 

whether you have engaged in 

substantial gainful activity if you are 

self-employed. We will not consider 

your income alone because the amount 

of income you actually receive may 

depend on a number of different factors, 

such as capital investment and profitsharing agreements. We will generally 

consider work that you were forced to 

stop or reduce to below substantial 

gainful activity after 6 months or less 

because of your impairment as an 

unsuccessful work attempt. See 

paragraph (d) of this section. We will 

evaluate your work activity based on the 

value of your services to the business 

regardless of whether you receive an 

immediate income for your services. We 

determine whether you have engaged in 

substantial gainful activity by applying 

three tests. If you have not engaged in 

substantial gainful activity under test 

one, then we will consider tests two and 

three. The tests are as follows: 

(i) Test one: You have engaged in 

substantial gainful activity if you render 

services that are significant to the 

operation of the business and receive a 

substantial income from the business. 

Paragraphs (b) and (c) of this section 

explain what we mean by significant 

services and substantial income for 

purposes of this test. 

(ii) Test Two: You have engaged in 

substantial gainful activity if your work 

activity, in terms of factors such as 

hours, skills, energy output, efficiency, 

duties, and responsibilities, is 

comparable to that of unimpaired 

individuals in your community who are 

in the same or similar businesses as 

their means of livelihood. 

(iii) Test Three: You have engaged in 

substantial gainful activity if your work 

activity, although not comparable to that 

of unimpaired individuals, is clearly 

worth the amount shown in 

§ 404.1574(b)(2) when considered in 

terms of its value to the business, or 

when compared to the salary that an 

owner would pay to an employee to do 

the work you are doing. 

* * * * * 

(c) What we mean by substantial 

income. (1) Determining countable 

income. We deduct your normal 

business expenses from your gross 

income to determine net income. Once 

we determine your net income, we 

deduct the reasonable value of any 

significant amount of unpaid help 

furnished by your spouse, children, or 

others. Miscellaneous duties that 

ordinarily would not have commercial 

value would not be considered 

significant. We deduct impairmentrelated work expenses that have not 

already been deducted in determining 

your net income. Impairment-related 

work expenses are explained in 

§ 404.1576. We deduct unincurred 

business expenses paid for you by 

another individual or agency. An 

unincurred business expense occurs 

when a sponsoring agency or another 

person incurs responsibility for the 

payment of certain business expenses, 

e.g., rent, utilities, or purchases and 

repair of equipment, or provides you 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59011 

with equipment, stock, or other material 

for the operation of your business. We 

deduct soil bank payments if they were 

included as farm income. That part of 

your income remaining after we have 

made all applicable deductions 

represents the actual value of work 

performed. The resulting amount is the 

amount we use to determine if you have 

done substantial gainful activity. For 

purposes of this section, we refer to this 

amount as your countable income. We 

will generally average your countable 

income for comparison with the 

earnings guidelines in § 404.1574(b)(2). 

See § 404.1574a for our rules on 

averaging of earnings. 

(2) When countable income is 

considered substantial. We will 

consider your countable income to be 

substantial if—

(i) It averages more than the amounts 

described in § 404.1574(b)(2); or 

(ii) It averages less than the amounts 

described in § 404.1574(b)(2) but it is 

either comparable to what it was before 

you became seriously impaired if we 

had not considered your earnings or is 

comparable to that of unimpaired selfemployed persons in your community 

who are in the same or a similar 

business as their means of livelihood. 

* * * * * 

(e) Special rules for evaluating the 

work you do after you have received 

social security disability benefits for at 

least 24 months. (1) General. We will 

apply the provisions of this paragraph to 

evaluate the work you are doing or have 

done if, at the time you do the work, 

you are entitled to social security 

disability benefits and you have 

received such benefits for at least 24 

months. We will apply the provisions of 

this paragraph only when we are 

evaluating that work to consider 

whether you have engaged in 

substantial gainful activity or 

demonstrated the ability to engage in 

substantial gainful activity for the 

purpose of determining whether your 

disability has ceased because of your 

work activity (see §§ 404.1592a(a)(1) 

and (3)(ii) and 404.1594(d)(5) and (f)(1)). 

We will use the countable income test 

described in paragraph (e)(3) of this 

section to determine whether the work 

you do after you have received such 

benefits for at least 24 months is 

substantial gainful activity or 

demonstrates the ability to do 

substantial gainful activity. We will not 

consider the services you perform in 

that work to determine that the work 

you are doing shows that you are able 

to engage in substantial gainful activity 

and are, therefore, no longer disabled. 

However, we may consider the services 

you perform to determine that you are 

not doing substantial gainful activity. 

We will generally consider work that 

you were forced to stop or reduce below 

substantial gainful activity after 6 

months or less because of your 

impairment as an unsuccessful work 

attempt. See paragraph (d) of this 

section. 

(2) The 24-month requirement. For 

purposes of paragraphs (a)(1) and (e) of 

this section, we consider you to have 

received social security disability 

benefits for at least 24 months beginning 

with the first day of the first month 

following the 24th month for which you 

received social security disability 

benefits that you were due. The 24 

months do not have to be consecutive. 

Any months for which you were 

entitled to benefits but for which you 

did not receive a benefit payment will 

not be counted for the 24-month 

requirement; for example, a month for 

which you did not receive a benefit 

payment because of worker’s 

compensation offset or because you 

repaid an overpayment to us. If you also 

receive supplemental security income 

payments based on disability or 

blindness under title XVI of the Social 

Security Act, months for which you 

received only supplemental security 

income payments will not be counted 

for the 24-month requirement. 

(3) Countable income test. We will 

compare your countable income to the 

earnings guidelines in § 404.1574(b)(2) 

to determine if you have engaged in 

substantial gainful activity. See 

paragraph (c)(1) of this section for an 

explanation of countable income. We 

will consider that you have engaged in 

substantial gainful activity if your 

monthly countable income averages 

more than the amounts described in 

§ 404.1574(b)(2) for the month(s) in 

which you work, unless the evidence 

shows that you did not render 

significant services in the month(s). See 

paragraph (b) of this section for what we 

mean by significant services. If your 

average monthly countable income is 

equal to or less than the amounts in 

§ 404.1574(b)(2) for the month(s) in 

which you work, or if the evidence 

shows that you did not render 

significant services in the month(s), we 

will consider that you work as a selfemployed person shows that you have 

not engaged in substantial gainful 

activity. 

6. Section 404.1590 is amended by 

adding three new sentences to the end 

of paragraph (a), revising paragraph (b) 

introductory text and paragraphs (b)(6), 

(b)(7)(i), and (b)(8), and adding new 

paragraphs (h) and (i) to read as follows: 

§ 404.1590 When and how often we will 

conduct a continuing disability review. 

(a) General. * * * In paragraphs (b) 

through (g) of this section, we explain 

when and how often we conduct 

continuing disability reviews for most 

individuals. In paragraph (h) of this 

section, we explain special rules for 

some individuals who are participating 

in the Ticket to Work program. In 

paragraph (i) of this section, we explain 

special rules for some individuals who 

work. 

(b) When we will conduct a 

continuing disability review. Except as 

provided in paragraphs (h) and (i) of 

this section, we will start a continuing 

disability review if—

* * * * * 

(6) You tell us that—

(i) You have recovered from your 

disability; or 

(ii) You have returned to work; 

(7) Your State Vocational 

Rehabilitation Agency tells us that—

(i) The services have been completed; 

or 

* * * * * 

(8) Someone in a position to know of 

your physical or mental condition tells 

us any of the following, and it appears 

that the report could be substantially 

correct: 

(i) You are not disabled; or 

(ii) You are not following prescribed 

treatment; or 

(iii) You have returned to work; or 

(iv) You are failing to follow the 

provisions of the Social Security Act or 

these regulations; 

* * * * * 

(h) If you are participating in the 

Ticket to Work program. If you are 

participating in the Ticket to Work 

program, we will not start a continuing 

disability review during the period in 

which you are using a ticket. However, 

this provision does not apply to reviews 

we conduct using the rules in 

§§ 404.1571–404.1576 to determine 

whether the work you have done shows 

that you are able to do substantial 

gainful activity and are, therefore, no 

longer disabled. See subpart C of part 

411 of this chapter. 

(i) If you are working and have 

received social security disability 

benefits for at least 24 months. 

(1) General. Notwithstanding the 

provisions in paragraphs (b)(4), (b)(5), 

(b)(6)(ii), (b)(7)(ii), and (b)(8)(iii) of this 

section, we will not start a continuing 

disability review based solely on your 

work activity if—

(i) You are currently entitled to 

disability insurance benefits as a 

disabled worker, child’s insurance 

benefits based on disability, or widow’s 

59012 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

or widower’s insurance benefits based 

on disability; and 

(ii) You have received such benefits 

for at least 24 months (see paragraph 

(i)(2) of this section). 

(2) The 24-month requirement. 

(i) The months for which you have 

actually received disability insurance 

benefits as a disabled worker, child’s 

insurance benefits based on disability, 

or widow’s or widower’s insurance 

benefits based on disability that you 

were due will count for the 24-month 

requirement under paragraph (i)(1)(ii) of 

this section, regardless of whether the 

months were consecutive. Any month 

for which you were entitled to benefits 

but for which you did not receive a 

benefit payment will not be counted for 

the 24-month requirement; for example, 

a month for which you did not receive 

a benefit payment because of worker’s 

compensation offset or because you 

repaid an overpayment to us. If you also 

receive supplemental security income 

payments based on disability or 

blindness under title XVI of the Social 

Security Act, months for which you 

received only supplemental security 

income payments will not be counted 

for the 24-month requirement. Benefits 

that are continued pending 

reconsideration and/or a hearing before 

an administrative law judge based on 

medical cessation determination (see 

§§ 404.1597a) will not be counted for 

the 24-month requirement. 

(ii) In determining whether paragraph 

(i)(1) of this section applies, we consider 

whether you have received disability 

insurance benefits as a disabled worker, 

child’s insurance benefits based on 

disability, or widow’s or widower’s 

insurance benefits based on disability 

for at least 24 months as of the date on 

which we start a continuing disability 

review. For purposes of this provision, 

the date on which we start a continuing 

disability review is the date on the 

notice we send you that tells you that 

we are beginning to review your 

disability case. 

(3) When we may start a continuing 

disability review even if you have 

received social security disability 

benefits for at least 24 months. Even if 

you meet the requirements of paragraph 

(i)(1) of this section, we may still start 

a continuing disability review for a 

reason(s) other than your work activity. 

We may start a continuing disability 

review if we have scheduled you for a 

periodic review of your continuing 

disability, we need a current medical or 

other report to see if your disability 

continues, we receive evidence which 

raises a question as to whether your 

disability continues, or you fail to 

follow the provisions of the Social 

Security Act or these regulations. For 

example, we will start a continuing 

disability review when you have been 

scheduled for a medical improvement 

expected diary review, and we may start 

a continuing disability review if you 

failed to report your work to us. 

(4) Reviews to determine whether the 

work you have done shows that you are 

able to do substantial gainful activity. 

Paragraph (i)(1) of this section does not 

apply to reviews we conduct using the 

rules in §§ 404.1571–404.1576 to 

determine whether the work you have 

done shows that you are able to do 

substantial gainful activity and are, 

therefore, no longer disabled. 

(5) Erroneous start of the continuing 

disability review. If we start a 

continuing disability review based 

solely on your work activity that results 

in a medical cessation determination, 

we will vacate the medical cessation 

determination if—

(i) You provide us evidence that 

establishes that you met the 

requirements of paragraph (i)(1) of this 

section as of the date of the start of your 

continuing disability review and that 

the start of the review was erroneous; 

and 

(ii) We receive the evidence within 12 

months of the date of the notice of the 

initial determination of medical 

cessation. 

7. Section 404.1592a is amended by 

revising the second sentence of 

paragraph (a)(1), the sixth sentence of 

paragraph (a)(2)(i), and paragraph (a)(3) 

to read as follows: 

§ 404.1592a The reentitlement period. 

(a) * * * 

(1) * * * When we decide whether 

this work is substantial gainful activity, 

we will apply all of the relevant 

provisions of §§ 404.1571–404.1576 

including, but not limited to, the 

provisions for averaging earnings, 

unsuccessful work attempts, and 

deducting impairment-related work 

expenses, as well as the special rules for 

evaluating the work you do after you 

have received disability benefits for at 

least 24 months. * * * 

(2)(i) * * * Once we have determined 

that your disability has ceased during 

the reentitlement period because of the 

performance of substantial gainful 

activity as explained in paragraph (a)(1) 

of this section, we will not apply the 

provisions of §§ 404.1574(c) and 

404.1575(d) regarding unsuccessful 

work attempts, the provisions of 

§ 404.1574a regarding averaging of 

earnings, or the special rules in 

§§ 404.1574(b)(3)(iii) and 404.1575(e) 

for evaluating the work you do after you 

have received disability benefits for at 

least 24 months, to determine whether 

benefits should be paid for any 

particular month in the reentitlement 

period that occurs after the month your 

disability ceased. 

(3) The way we will consider your 

work activity after your reentitlement 

period ends (see paragraph (b)(2) of this 

section) will depend on whether you 

worked during the reentitlement period 

and if you did substantial gainful 

activity. 

(i) If you worked during the 

reentitlement period and we decided 

that your disability ceased during the 

reentitlement period because of your 

work under paragraph (a)(1) of this 

section, we will find that your 

entitlement to disability benefits 

terminates in the first month in which 

you engaged in substantial gainful 

activity after the end of the 

reentitlement period (see § 404.325). 

(See § 404.321 for when entitlement to 

a period of disability ends.) When we 

make this determination, we will 

consider only your work in, or earnings 

for, that month; we will not apply the 

provisions of §§ 404.1574(c) and 

404.1575(d) regarding unsuccessful 

work attempts, the provisions of 

§ 404.1574a regarding averaging of 

earnings, or the special rules in 

§§ 404.1574(b)(3)(iii) and 404.1575(e) 

for evaluating the work you do after you 

have received disability benefits for at 

least 24 months. 

(ii) If we did not find that your 

disability ceased because of work 

activity during the reentitlement period, 

we will apply all of the relevant 

provisions of §§ 404.1571–404.1576 

including, but not limited to, the 

provisions for averaging earnings, 

unsuccessful work attempts, and 

deducting impairment-related work 

expenses, as well as the special rules for 

evaluating the work you do after you 

have received disability benefits for at 

least 24 months, to determine whether 

your disability ceased because you 

performed substantial gainful activity 

after the reentitlement period. If we find 

that your disability ceased because you 

performed substantial gainful activity in 

a month after your reentitlement period 

ended, you will be paid benefits for the 

month in which your disability ceased 

and the two succeeding months. After 

those three months, your entitlement to 

a period of disability or to disability 

benefits terminates (see §§ 404.321 and 

404.325). 

* * * * * 

8. Section 404.1594 is amended by 

adding a new second sentence to 

paragraph (b) introductory text, 

redesignating the second sentence of 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59013 

paragraph (c) introductory text as the 

third sentence and adding a new second 

sentence, revising the third sentence of 

paragraph (f) introductory text and 

adding a new fourth sentence, and 

adding a new paragraph (i) to read as 

follows: 

§ 404.1594 How we will determine whether 

your disability continues or ends. 

* * * * * 

(b) Terms and definitions. * * * In 

addition, see paragraph (i) of this 

section if you work during your current 

period of entitlement based on disability 

or during certain other periods. 

* * * * * 

(c) Determining medical improvement 

and its relationship to your abilities to 

do work. * * * (In addition, see 

paragraph (i) of this section if you work 

during your current period of 

entitlement based on disability or 

during certain other periods.) * * * 

* * * * * 

(f) Evaluation steps. * * * The steps 

are as follows. (See paragraph (i) of this 

section if you work during your current 

period of entitlement based on disability 

or during certain other periods.) 

* * * * * 

(i) If you work during your current 

period of entitlement based on disability 

or during certain other periods. (1) We 

will not consider the work you are 

doing or have done during your current 

period of entitlement based on disability 

(or, when determining whether you are 

entitled to expedited reinstatement of 

benefits under section 223(i) of the Act, 

the work you are doing or have done 

during or after the previously 

terminated period of entitlement 

referred to in section 223(i)(1)(B) of the 

Act) to be past relevant work under 

paragraph (f)(7) of this section or past 

work experience under paragraph (f)(8) 

of this section. In addition, if you are 

currently entitled to disability benefits 

under title II of the Social Security Act, 

we may or may not consider the 

physical and mental activities that you 

perform in the work you are doing or 

have done during your current period of 

entitlement based on disability, as 

explained in paragraphs (i)(2) and (3) 

below. 

(2) If you are currently entitled to 

disability insurance benefits as a 

disabled worker, child’s insurance 

benefits based on disability, or widow’s 

or widower’s insurance benefits based 

on disability under title II of the Social 

Security Act, and at the time we are 

making a determination on your case 

you have received such benefits for at 

least 24 months, we will not consider 

the activities you perform in the work 

you are doing or have during your 

current period of entitlement based on 

disability if they support a finding that 

your disability has ended. (We will use 

the rules in § 404.1590(i)(2) to 

determine whether the 24-month 

requirement is met.) However, we will 

consider the activities you do in that 

work if they support a finding that your 

disability continues or they do not 

conflict with a finding that your 

disability continues. We will not 

presume that you are still disabled if 

you stop working. 

(3) If you are not a person described 

in § 404.1594(i)(2), we will consider the 

activities you perform in your work at 

any of the evaluation steps in paragraph 

(f) of this section at which we need to 

assess your ability to function. 

PART 416—SUPPLEMENTAL 

SECURITY INCOME FOR THE AGED, 

BLIND, AND DISABLED 

Subpart I—Determining Disability and 

Blindness 

9. The authority citation for subpart I 

of part 416 is revised to read as follows: 

Authority: Secs. 221(m), 702(a)(5), 1611, 

1614, 1619, 1631(a), (c), and (d)(1), and 1633 

of the Social Security Act (42 U.S.C. 421(m), 

902(a)(5), 1382, 1382c, 1382h, 1383(a), (c), 

and (d)(1), and 1383b); secs. 4(c) and 5, 6(c)–

(e), 14(a), and 15, Pub. L. 98–460, 98 Stat. 

1794, 1801, 1802, and 1808 (42 U.S.C. 421 

note, 423 note, 1382h note). 

10. Section 416.974 is amended by 

revising paragraph (b) to read as follows: 

§ 416.974 Evaluation guides if you are an 

employee. 

* * * * * 

(b) Earnings guidelines. (1) General. If 

you are an employee, we first consider 

the criteria in paragraph (a) of this 

section and § 416.976, and then the 

guides in paragraphs (b)(2) and (3) of 

this section. When we review your 

earnings to determine if you have been 

performing substantial gainful activity, 

we will subtract the value of any 

subsidized earnings (see paragraph 

(a)(2) of this section) and the reasonable 

cost of any impairment-related work 

expenses from your gross earnings (see 

§ 416.976). The resulting amount is the 

amount we use to determine if you have 

done substantial gainful activity. We 

will generally average your earnings for 

comparison with the earnings 

guidelines in paragraphs (b)(2) and (3) 

of this section. See § 416.974a for our 

rules on averaging earnings. 

(2) Earnings that will ordinarily show 

that you have engaged in substantial 

gainful activity. We will consider that 

your earnings from your work activity as 

an employee (including earnings from 

work in a sheltered workshop or a 

comparable facility especially set up for 

severely impaired persons) show that 

you have engaged in substantial gainful 

activity if: 

(i) Before January 1, 2001, they 

averaged more than the amount(s) in 

Table 1 of this section for the time(s) in 

which you worked. 

(ii) Beginning January 1, 2001, and 

each year thereafter, they average more 

than the larger of: 

(A) The amount for the previous year, 

or 

(B) An amount adjusted for national 

wage growth, calculated by multiplying 

$700 by the ratio of the national average 

wage index for the year 2 calendar years 

before the year for which the amount is 

being calculated to the national average 

wage index for the year 1998. We will 

then round the resulting amount to the 

next higher multiple of $10 where such 

amount is a multiple of $5 but not of 

$10 and to the nearest multiple of $10 

in any other case. 

TABLE 1 

For months: 

Your monthly 

earnings 

averaged 

more than: 

In calendar years before 

1976 .................................. $200 

In calendar year 1976 .......... 230 

In calendar year 1977 .......... 240 

In calendar year 1978 .......... 260 

In calendar year 1979 .......... 280 

In calendar years 1980–1989 300 

January 1990–June 1999 ..... 500 

July 1999–December 2000 .. 700 

(3) Earnings that will ordinarily show 

that you have not engaged in substantial 

gainful activity. 

(i) General. If your average monthly 

earnings are equal to or less than the 

amount(s) determined under paragraph 

(b)(2) of this section for the year(s) in 

which you work, we will generally 

consider that the earnings from your 

work as an employee (including 

earnings from work in a sheltered 

workshop or comparable facility) will 

show that you have not engaged in 

substantial gainful activity. We will 

generally not consider other information 

in addition to your earnings except in 

the circumstances described in 

paragraph (b)(3)(ii) of this section. 

(ii) When we will consider other 

information in addition to your 

earnings. We will generally consider 

other information in addition to your 

earnings if there is evidence indicating 

that you may be engaging in substantial 

gainful activity or that you are in a 

position to control when earnings are 

59014 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

paid to you or the amount of wages paid 

to you; (for example, if you are working 

for a small corporation owned by a 

relative). Examples of other information 

we may consider include, whether—

(A) Your work is comparable to that 

of unimpaired people in your 

community who are doing the same or 

similar occupations as their means of 

livelihood, taking into account the time, 

energy, skill, and responsibility 

involved in the work; and 

(B) Your work, although significantly 

less than that done by unimpaired 

people, is clearly worth the amounts 

shown in paragraph (b)(2) of this 

section, according to pay scales in your 

community. 

* * * * * 

11. Section 416.990 is amended by 

adding three new sentences to the end 

of paragraph (a), revising paragraph (b) 

introductory text and paragraphs (b)(4), 

(b)(6), and (b)(8), and adding new 

paragraphs (h) and (i) to read as follows: 

§ 416.990 When and how often we will 

conduct a continuing disability review. 

(a) General. * * * In paragraphs (b) 

through (g) of this section, we explain 

when and how often we conduct 

continuing disability reviews for most 

individuals. In paragraph (h) of this 

section, we explain special rules for 

some individuals who are participating 

in the Ticket to Work program. In 

paragraph (i) of this section, we explain 

special rules for some individuals who 

work and have received social security 

benefits as well as supplemental 

security income payments. 

(b) When we will conduct a 

continuing disability review. Except as 

provided in paragraphs (h) and (i) of 

this section, we will start a continuing 

disability review if—

* * * * * 

(4) You return to work; 

* * * * * 

(6) You tell us that—

(i) You have recovered from your 

disability; or 

(ii) You have returned to work; 

* * * * * 

(8) Someone in a position to know of 

your physical or mental condition tells 

us any of the following, and it appears 

that the report could be substantially 

correct: 

(i) You are not disabled or blind; or 

(ii) You are not following prescribed 

treatment; or 

(iii) You have returned to work; or 

(iv) You are failing to follow the 

provisions of the Social Security Act or 

these regulations; 

* * * * * 

(h) If you are participating in the 

Ticket to Work program. If you are 

participating in the Ticket to Work 

program, we will not start a continuing 

disability review during the period in 

which you are using a ticket. See 

subpart C of part 411 of this chapter. 

(i) If you are working and have 

received social security disability 

benefits for at least 24 months. 

(1) General. Notwithstanding the 

provisions in paragraphs (b)(4), (b)(5), 

(b)(6)(ii), (b)(7)(ii), and (b)(8)(iii) of this 

section, we will not start a continuing 

disability review based solely on your 

work activity if—

(i) You are currently entitled to 

disability insurance benefits as a 

disabled worker, child’s insurance 

benefits based on disability, or widow’s 

or widower’s insurance benefits based 

on disability under title II of the Social 

Security Act (see subpart D of part 404 

of this chapter); and 

(ii) You have received such benefits 

for at least 24 months (see paragraph 

(i)(2) of this section). 

(2) The 24-month requirement. (i) The 

months for which you have actually 

received disability insurance benefits as 

a disabled worker, child’s insurance 

benefits based on disability, or widow’s 

or widower’s insurance benefits based 

on disability that you were due under 

title II of the Social Security Act will 

count for the 24-month requirement 

under paragraph (i)(1)(ii) of this section, 

regardless of whether the months were 

consecutive. Any month for which you 

were entitled to social security 

disability benefits but for which you did 

not receive a benefit payment will not 

be counted for the 24-month 

requirement; for example, a month for 

which you did not receive a benefit 

payment because of worker’s 

compensation offset or because you 

repaid an overpayment to us. Months 

for which you received only 

supplemental security income payments 

will not be counted for the 24-month 

requirement. Benefits that are continued 

pending reconsideration and/or a 

hearing before an administrative law 

judge based on medical cessation 

determination (see § 416.996) will not 

be counted for the 24-month 

requirement. 

(ii) In determining whether paragraph 

(i)(1) of this section applies, we consider 

whether you have received disability 

insurance benefits as a disabled worker, 

child’s insurance benefits based on 

disability, or widow’s or widower’s 

insurance benefits based on disability 

under title II of the Social Security Act 

for at least 24 months as of the date on 

which we start a continuing disability 

review. For purposes of this provision, 

the date on which we start a continuing 

disability review is the date on the 

notice we send you that tells you that 

we are beginning to review your 

disability case. 

(3) When we may start a continuing 

disability review even if you have 

received social security disability 

benefits for at least 24 months. Even if 

you meet the requirements of paragraph 

(i)(1) of this section, we may still start 

a continuing disability review for a 

reason(s) other than your work activity. 

We may start a continuing disability 

review if we have scheduled you for a 

periodic review of your continuing 

disability, we need a current medical or 

other report to see if your disability 

continues, we receive evidence which 

raises a question as to whether your 

disability or blindness continues, or you 

fail to follow the provisions of the 

Social Security Act or these regulations. 

For example, we will start a continuing 

disability review when you have been 

scheduled for a medical improvement 

expected diary review, and we may start 

a continuing disability review if you 

failed to report your work to us. 

(4) Erroneous start of the continuing 

disability review. If we start a 

continuing disability review based 

solely on your work activity that results 

in a medical cessation determination, 

we will vacate the medical cessation 

determination if—

(i) You provide us evidence that 

establishes that you met the 

requirements of paragraph (i)(1) of this 

section as of the date of the start of your 

continuing disability review and that 

the start of the review was erroneous; 

and 

(ii) We receive the evidence within 12 

months of the date of the notice of the 

initial determination of medical 

cessation. 

12. Section 416.994 is amended by 

revising the section heading, adding a 

new sentence to the end of paragraph 

(b)(1) introductory text, redesignating 

the second sentence of paragraph (b)(2) 

introductory text as the third sentence 

and adding a new second sentence, 

revising the third sentence of paragraph 

(b)(5) introductory text and adding a 

new fourth sentence, and adding a new 

paragraph (b)(8) to read as follows: 

§ 416.994 How we will determine whether 

your disability continues or ends, disabled 

adults. 

* * * * * 

(b) Disabled persons age 18 or over 

(adults). * * * 

(1) Terms and definitions. * * * In 

addition, see paragraph (b)(8) of this 

section if you work during your current 

period of eligibility based on disability 

or during certain other periods. 

* * * * * 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59015 

(2) Determining medical improvement 

and its relationship to your abilities to 

do work. 

* * * (In addition, see paragraph 

(b)(8) of this section if you work during 

your current period of eligibility based 

on disability or during certain other 

periods.) * * * 

* * * * * 

(5) Evaluation steps. * * * The steps 

are as follows. (See paragraph (b)(8) of 

this section if you work during your 

current period of eligibility based on 

disability or during certain other 

periods.) 

* * * * * 

(8) If you work during your current 

period of eligibility based on disability 

or during certain other periods. 

(i) We will not consider the work you 

are doing or have done during your 

current period of eligibility based on 

disability (or, when determining 

whether you are eligible for expedited 

reinstatement of benefits under section 

1631(p) of the Act, the work you are 

doing or have done during or after the 

previously terminated period of 

eligibility referred to in section 

1631(p)(1)(B) of the Act) to be past 

relevant work under paragraph (b)(5)(vi) 

of this section or past work experience 

under paragraph (b)(5)(vii) of this 

section. In addition, if you are currently 

entitled to disability benefits under title 

II of the Social Security Act, we may or 

may not consider the physical and 

mental activities that you perform in the 

work you are doing or have done during 

your current period of entitlement based 

on disability, as explained in paragraphs 

(b)(8)(ii) and (iii). 

(ii) If you are currently entitled to 

disability insurance benefits as a 

disabled worker, child’s insurance 

benefits based on disability, or widow’s 

or widower’s insurance benefits based 

on disability under title II of the Social 

Security Act, and at the time we are 

making a determination on your case 

you have received such benefits for at 

least 24 months, we will not consider 

the activities you perform in the work 

you are doing or have during your 

current period of entitlement based on 

disability if they support a finding that 

your disability has ended. (We will use 

the rules in § 416.990(i)(2) to determine 

whether the 24-month requirement is 

met.) However, we will consider the 

activities you do in that work if they 

support a finding that your disability 

continues or they do not conflict with 

a finding that your disability continues. 

We will not presume that you are still 

disabled if you stop working. 

(iii) If you are not a person described 

in paragraph (b)(8)(ii) of this section, we 

will consider the activities you perform 

in your work at any of the evaluation 

steps in paragraph (f) of this section at 

which we need to assess your ability to 

function. 

* * * * * 

Subpart N—Determinations, 

Administrative Review Process, and 

Reopening of Determinations and 

Decisions 

12. The authority citation for subpart 

N continues to read as follows: 

Authority: Secs. 702(a)(5), 1631, and 1633 

of the Social Security Act (42 U.S.C. 

902(a)(5), 1383, and 1383b). 

13. Section 416.1403 is amended by 

removing the word ‘‘and’’ at the end of 

paragraph (a)(20), replacing the period 

at the end of paragraph (a)(21) with ‘‘; 

and’’, and adding new paragraph (a)(22) 

to read as follows: 

§ 416.1403 Administrative actions that are 

not initial determinations. 

(a)* * * 

(22) Starting or discontinuing a 

continuing disability review. 

* * * * * 

[FR Doc. 05–20266 Filed 10–7–05; 8:45 am] 

BILLING CODE 4191–02–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of the Secretary 

Office of Inspector General 

42 CFR Part 1001 

RIN 0991–AB39 

Medicare and State Health Care 

Programs: Fraud and Abuse; Safe 

Harbor for Certain Electronic 

Prescribing Arrangements Under the 

Anti-Kickback Statute 

AGENCY: Office of Inspector General 

(OIG), HHS. 

ACTION: Proposed Rule. 

SUMMARY: As required by the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA), 

Public Law 108–173, this proposed rule 

would establish a new safe harbor under 

the Federal anti-kickback statute for 

certain arrangements involving the 

provision of electronic prescribing 

technology. Specifically, the safe harbor 

would protect certain arrangements 

involving hospitals, group practices, 

and prescription drug plan (PDP) 

sponsors and Medicare Advantage (MA) 

organizations that provide to specified 

recipients certain nonmonetary 

remuneration in the form of hardware, 

software, or information technology and 

training services necessary and used 

solely to receive and transmit electronic 

prescription drug information. In 

addition, using our separate legal 

authority under section 1128B(b)(3)(E) 

of the Social Security Act (the ‘‘Act’’), 

we are also proposing separate safe 

harbor protection for certain electronic 

health records software and directly 

related training services. These 

exceptions are consistent with the 

President’s goal of achieving 

widespread adoption of interoperable 

electronic health records for the purpose 

of improving the quality and efficiency 

of health care, while maintaining the 

levels of security and privacy that 

consumers expect. 

DATES: To assure consideration, public 

comments must be delivered to the 

address provided below by no later than 

5 p.m. on December 12, 2005. 

ADDRESSES: You may submit comments 

by any of the methods set forth below. 

In all cases, when commenting, please 

refer to file code OIG–405–P. 

• Mail—Office of Inspector General, 

Department of Health and Human 

Services, Attention: OIG–405–P, Room 

5246, Cohen Building, 330 

Independence Avenue, SW., 

Washington, DC 20201. 

Please allow sufficient time for us to 

receive mailed comments by the due 

date in the event of delivery delays. 

• Hand delivery/courier—Office of 

Inspector General, Department of Health 

and Human Services, Attention: OIG–

405–P, Room 5246, Cohen Building, 330 

Independence Avenue, SW., 

Washington, DC 20201. 

Because access to the Cohen Building 

is not readily available to persons 

without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

OIG’s drop box located in the main 

lobby of the building. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Include agency 

name and identifier RIN 0991–AB36. 

Because of staff and resource 

limitations, we cannot accept comments 

by facsimile (FAX) transmission. For 

information on viewing public 

comments, see section V of the 

Supplementary Information section 

preamble. 

FOR FURTHER INFORMATION CONTACT: 

Catherine Martin, Office of Counsel to 

the Inspector General, (202) 619–0335. 

SUPPLEMENTARY INFORMATION: