BRIEF FRAMEWORK AND BACKGROUND T2 & T16 OBJECTIVE

Social Security Disability Reference Material Section 202 of the Social Security Act (42 U.S.C. 402) Section 223 of the Social Security Act (42 U.S.C. 423) Section 1602 and 1614 of the Social Security Act (42 U.S.C. 1381a and 1382c) 20 CFR 404.1 et. seq. and 416.101 et. seq. (Code of Federal Regulations, Title 20, Parts 404 and 416) BRIEF FRAMEWORK AND BACKGROUND T2 & T16 OBJECTIVE 1: Identify the general programs available under Title II and Title XVI of the Social Security Act as amended. Social Security Programs The Social Security Administration (SSA) directly administers four major programs enacted through the Social Security Act. Old Age Insurance (Retirement); Survivors Insurance; Disability Insurance, and Supplemental Security Income (SSI) Title II of the Social Security Act (42 USC 201 through 233) - Social Security Benefits: Old age, survivors and disability insurance are an earned right based on an individual s earnings record which reflects payment of Social Security (FICA) taxes. In general, the amount of the Social Security benefit is based on factors such as the date of birth, type of benefit applied for, and earnings. In addition, there is a limit to the amount of benefits that can be paid on each Social Security record, known as the family maximum. (If the sum of the benefits payable on the worker s account is greater than this family maximum, the benefits to family members will be reduced proportionately). Title XVI of the Social Security Act (42 USC 1381 through 1383d) - Supplemental Security Income Payments: Old age and disability benefits based on financial need subject to income and resource limitations, and residential requirements. SSI is BRIEF FRAMEWORK AND BACKGROUND T2 & T16 AJ-01 administered by SSA, although payments are financed by general revenue funds of the U.S. Treasury rather than from the Social Security Trust Funds. Types of Title II Benefits Federal Old Age (Retirement), Survivors, and Disability

Insurance Benefits Section 201 through 234 of the Social Security Act (codified at 42 USC 401 through 434) Retirement Insurance Benefits are payable to individuals who are at least 62, have applied for benefits, and are fully insured (20 CFR 404.310). Special Payments at Age 72 (20 CFR 404.380) Survivors Benefits are payable to certain family members of deceased wage earners who die with sufficient quarters of coverage. These benefits are based upon the deceased wage earner s earnings record. Widows, widowers (20 CFR 404.335), mothers and fathers (20 CFR 404.339); Surviving divorced spouse (20 CFR 404.336 and 404.340); Dependent children (20 CFR 404.350); Dependent Parents (20 CFR 404.370). Dependents of wage earners who are entitled to benefits (old age or disability) may also be entitled to benefits based on the wage earner s earnings record. These are frequently referred to as auxiliary benefits. A husband or wife who is 62 or older (unless they are entitled to a higher Social Security benefit on their own earnings record), and young husbands and wives with a child in care (20 CFR 404.330). Divorced spouses (20 CFR 404.331) BRIEF FRAMEWORK AND BACKGROUND T2 & T16 Dependent children (20 CFR 404.350) Lump-Sum Death Payment (20 CFR 404.390) Disability Benefits under Full Retirement Age A period of disability is a period where the earnings record of a disabled worker is frozen, and therefore will be excluded in determining either insured status or the amount of benefits. (20 CFR 404.320 404.321) Disability Insurance Benefits (DIB) Monthly cash payments for blind and disabled workers based upon their earnings record. (20 CFR 404.315, 404.316 and 404.320) Types of Title XVI Payments Supplemental Security Income (SSI) for the Aged, Blind and Disabled Sections 1601 through 1637 of the Social Security Act (Codified at 42 USC 1381 through 1383d) Aged At least 65 years old (20 CFR 416.202(a)(1) and Subpart H) Blind Adults and children (20 CFR 416.202 (a)(2) and Subpart I) Disabled Adults and children (20 CFR 416.202 (3) and Subpart I) The Social Security Act defines disability differently for adults and children. The evaluation of SSI disability claims for children will be discussed in depth in Module 17. BRIEF FRAMEWORK AND BACKGROUND T2 & T16

OBJECTIVE 2: Recognize the general criteria for entitlement to and eligibility for Title II and Title XVI disability benefits for adults. Basic Definition of Disability for Adults - Sections 223(d) (1) (A) and 1614(a) (2) and (3) (A) and (B) of the Social Security Act Disability for individuals who have attained age 18 is defined as the inability to do any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or is expected to last for a continuous period of not less than 12 months. (20 CFR 404.1505 and 416.905) Note: Unrelated impairments cannot be tacked to meet the 12-month duration requirement. (20 CFR 404.1522 and 416.922) Entitlement Factors for Disability Benefits under Title II of the Act To receive a period of disability and disability insurance benefits, an individual must: Be under full retirement age (20 CFR 404.315 and 404.321(c)(1)); Full retirement age depends on the year of the wage earner s birth (See 20 CFR 404.409). Disability benefits automatically change to old age benefits and a period of disability terminates the month before the month of attainment of full retirement age (20 CFR 404.316(a) (2) and 404.321(c) (1)). File an application while disabled or no later than 12 months after the month in which their period of disability ended (20 CFR 404.315(a)(2) and 404.320(b)(3)); Have enough Social Security earnings to be insured for disability (20 CFR 404.315(a)(1) and 404.320(b)(2)); Be disabled as defined in the Act (20 CFR 404.315(a)(3) and 404.320(b)(1)); and Complete a waiting period of five full calendar months, unless they were previously entitled to a period of disability within five years of the month they again became disabled (20 CFR 404.315(a) (4) and 404.320(b) (4)). Eligibility Requirements for Disability Benefits under Title XVI of the Act To be eligible for SSI payments based on disability, an individual must: Be blind or disabled (20 CFR 416.202(a)(2) and (3));

Be a resident of the United States and be a citizen or meet certain alien status requirements (20 CFR 416.202(b)); Have no more income than is permitted (20 CFR 416.202(c) and subparts K and D); Have no more resources than is permitted (20 CFR 416.202(d) and subpart L); File an application (20 CFR 416.202(g) and Subpart C); Not be fleeing to avoid prosecution or to avoid custody or violating a condition of probation or parole (20 CFR 416.202(f)). File for any other benefits for which he or she is eligible (20 CFR 416.210); and Provide SSA with permanent authorization for himself or herself and any deemors to access information on any financial accounts they own (20 CFR 416.207). Applications Retroactivity Title II An application for disability insurance benefits is retroactive for up to 12 months prior to the month in which it is filed (20 CFR 404.621(a)). A period of disability may be established beginning more than 12 months prior to the month in which the application is filed. Generally, the application must be filed while the individual is disabled, or no later than 12 months after the month in which the period of disability ended. However, the application may be filed up to 36 months after disability ended if the claimant was unable to apply within the 12-month period because of a physical or mental condition (20 CFR 404.621(d)). Title XVI Applications for SSI have no retroactivity. The earliest month for which benefits can be paid is the month following the month in which the application was filed (20 CFR 416.335). Protective Filing Dates Under certain circumstances, a date earlier than the actual filing date may be used as the application date if the claimant has filed a written statement or made an oral inquiry about filing an application (20 CFR 404.630 through 404.632 and, 416.340 through 416.351). BRIEF FRAMEWORK AND BACKGROUND T2 & T16 Major Differences between Title II and Title XVI Disability Programs Retroactivity Title XVI application is not retroactive. A Title II application may permit up to 12 months of retroactive payments (i.e., the period of disability commenced at least 17 months prior to the filing of the application, permitting for the five-month waiting period to be completed before

benefits begin). Waiting Period The five-month waiting period for disability benefits under Title II is not required under Title XVI. Insured Status Requirements There are no insured status requirements under Title XVI. Income and Resource Limitations Title XVI has many income and resource limitations. Benefits under Title II are not subject to income and resource limitations. Note: Disability benefits under Title II may be reduced due to receipt of worker s compensation or public disability payments before the individual attains age 65 (20 CFR 404.317 and 404.408). No payments are made to anyone other than the disabled, blind or aged individual under Title XVI. Under Title II, family members may be entitled to benefits on the account of a disabled wage earner, subject to the family maximum limitation. OBJECTIVE 3: Define and determine insured status. Insured Status A basic requirement for all benefits under Title II of the Social Security Act is the wage earner having sufficient postings to attain insured status. Quarters of Coverage (QCs) The quarter of coverage (QC) is the basic unit of Social Security coverage used in determining an individual s insured status (20 CFR 404.140(a)). QCs are credited based on an individual s earnings covered under Social Security (20 CFR 404.140(a)). Before 1978: QCs were credited to specific calendar quarters based on reported quarterly earnings of at least $50 in wages or $100 in self-employment income (20 CFR 404.140(b)). EXCEPTION: If an individual's wages and/or self-employment income for the year equaled or exceeded the maximum taxable amount (20 CFR 404.1047 and POMS RS 01404.300) for the year, he or she was credited with a QC for each quarter of the year regardless of when the income was received (20 CFR 404.141(d)). After 1977: QCs are credited for each part of total covered earnings in a calendar year that equals the amount required for a QC in that year (20 CFR 404.140(c) and 404.143, and POMS RS 00301.250). Example: In 1978, the amount required for each QC was $250. Earnings of $650 in 1978 would have resulted in 2 QCs since $650 is more than two times, but less than three times $250. Earnings of $1,000 or more in 1978 would have resulted in 4 QCs. Basic Rules Regarding QCs 1. The amount required for a QC has increased each year since 1978

based on a formula and is shown on the earnings record. 2. No more than four QCs can be credited for any calendar year (20 CFR 404.143(a)). 3. QCs credited for years after 1977 are flexible in that they may be assigned to any quarter in the calendar year subject to the limitations mentioned in Number 5 below. A quarter of coverage is assigned to a specific calendar quarter whenever necessary to meet the requirements for insured status (fully, currently, or disability insured status) or entitlement to a computation or recomputation of the individual s Primary Insurance Amount (PIA) (20 CFR 404.143(b) and POMS RS 00301.230B). 4. A QC is acquired as of the first day of the calendar quarter for which it is credited or to which it is assigned (20 CFR 404.145). 5. An individual cannot be credited with a QC for a calendar quarter which: Has not begun (a future quarter) (20 CFR 404.146(a) and POMS RS 00301.240.4), Begins after the quarter of the individual's death (20 CFR 404.146(b) and POMS RS 00301.240.2), Has already been counted as a QC (20 CFR 404.146(c) and POMS RS 00301.240.1), or Is included in a prior period of disability, unless: It is the first or last quarter of the period, or The prior period of disability is not being taken into consideration to avoid a denial of benefits (20 CFR 404.146(d), 404.320(a) and POMS RS 00301.240.3). Assigning Quarters of Coverage For calendar years after 1978, a QC is credited to a specific calendar quarter only if the assignment is necessary to: give the worker fully or currently insured status; entitle the worker to a computation or recomputation of their primary insurance amount (PIA); or permit the worker to establish a period of disability (20 CFR 404.143(b) and POMS RS 00301.230B). For example, a worker only has 1 QC in a particular year and must have a QC in the last quarter of that year to be within the mandatory 40 quarter period to meet the 20/40 requirements. In this case the QC may be credited to the last quarter of that year regardless of when in that year the actual wages were earned to permit the worker to attain the necessary insured status. Note: The earnings record will usually show the QC in the first quarter of the calendar year, but the regulations necessitate calculation of insured status based on the quarter being counted in the quarter most advantageous to the claimant. Totalization Agreements The Social Security Act allows the President to enter into international

agreements to coordinate the U.S. Social Security programs with the Social Security programs of other countries. These agreements are known as totalization agreements and might permit the addition of quarters of coverage to an individual s earnings record based on work done in a foreign country (CFR 404.1901ff). Currently, the United States has agreements with 21 countries: Italy (1978), Germany (1979), Switzerland (1980), Belgium, Canada and Norway (1984), the United Kingdom (1985), Sweden (1987), France and Spain (1988), Portugal (1989), the Netherlands (1990), Austria (1991), Finland (1992), Ireland and Luxembourg (1993), Greece (1994), Chile and South Korea (2001), Australia (2002), and Japan (2005). Fully Insured Status Basic Requirements for a Period of Disability and Disability Insurance Benefits 1. Minimum of 6 QCs and maximum of 40 QCs (20 CFR 404.110(b)). 2. One QC (whenever acquired) for each calendar year elapsing after 1950 or if later, after the year the claimant attained age 21, and before the earlier of: the year the claimant attained age 62, or the year in which the period of disability begins, or the claimant dies (20 CFR 404.110 and 404.132 and POMS RS 00301.105.B.1). Effects of a Prior Period of Disability Any year that is wholly or partly in an established period of disability is not counted as an elapsed year (20 CFR 404.110c)). Disability Insured Status There are four different rules for determining disability insured status for purposes of establishing a period of disability or becoming entitled to disability insurance benefits. Pursuant to 20 CFR 404.130(a), to have disability insured status, an individual must meet one of these rules and must be fully insured (see preceding section of this module). Rule I - 20/40 Rule (20 CFR 404.130(b)) The individual must be fully insured (see preceding section of this module); and have at least 20 QCs in the 40-quarter period ending with that quarter. Note: An older claimant with only recent quarters of coverage may meet the 20/40 Rule, but may not be entitled due to needing more than 20 QCs to be fully insured. OR Rule II - under Age 31 (20 CFR 404.130(c)) The individual must become disabled before the calendar quarter in which he/she attains age 31, be fully insured (see preceding section of this module), AND have QCs in at least one-half of the quarters during the period ending with that quarter and beginning with the quarter after the

quarter in which he or she attained age 21. If the number of quarters during the specified period is an odd number, the number is reduced by one before dividing by two. If the period has less than 12 quarters, the individual must have at least 6 QCs in the 12-quarter period ending with that quarter. OR Rule III - Subsequent Period of Disability with Prior Period of Disability before Age 31 (20 CFR 404.130(d)) An individual who becomes disabled at age 31 or later is insured for disability insurance benefits if he/she: Had a prior period of disability before age 31 for which he/she was insured only by applying the Under Age 31 Rule II above, and He/she is fully insured (see preceding section of this module), and He/she has QCs in at least one-half the calendar quarters in the period beginning with the quarter after the quarter in which he/she attained age 21 and through the quarter in which the current period of disability began, up to a maximum of 20 QCs out of 40 calendar quarters. However, if there is an odd number of quarters in the specified period, reduce by one before dividing by two. And if the specified period has less than 12 quarters, the individual must have at least 6 QCs in the 12-quarter period ending with the quarter in which the current disability began. Note: In applying the first three rules, the 40 quarter period or other period specified by the rule does not include any quarter all or part of which is in a prior period of disability unless it is the first or last quarter of a prior period of disability and is a QC. However, all quarters of a prior period of disability will be counted if doing so will result in entitlement (20 CFR 404.130(f)). OR Rule IV - Statutory Blindness (20 CFR 404.130(e)) The individual must be disabled due to blindness as defined in 20 CFR. 404.1581; and Be fully insured (see preceding section of this module). Date Last Insured (DLI) Definition The date last insured is the last day of the last calendar quarter in which the requirements for entitlement to a period of disability and disability insurance benefits are met. POMS RS 00301.148 Correlation of Onset of Disability and Date Last Insured If onset of disability cannot be established on or before the DLI, the claim for a period of disability and disability insurance benefits under Title II must be denied. If the claim is for Title II benefits only, then the period of adjudication ends with the DLI. If there is a concurrent claim (i.e., applications for benefits both under Title II and Title XVI), then the period of adjudication continues

through the date of the decision with entitlement to Title II benefits only being possible if an onset of disability is within the insured period. Note: When there is evidence indicating that earnings may have been posted to the claimant's earnings record after the initial calculation of the DLI, a new earnings record should be obtained. The DLI may need to be recalculated before denying the claim based on lack of disability prior to the expiration of the DLI. Date First Insured Occasionally, a claimant does not acquire the QCs required for disability insured status until after the alleged onset date (AOD). Since QCs are now credited based on annual earnings, income at the beginning of a year may be sufficient for the claimant to acquire four QCs for the year. A claimant may also acquire QCs after the AOD by working below the substantial gainful activity (SGA) level or during an unsuccessful work attempt (UWA). In any of these situations, the claimant is first insured on the first day of the calendar quarter in which the final QC needed for insured status is credited (20 CFR 404.131). Entitlement to a period of disability cannot be established before the date first insured, regardless of the actual onset date of disability. Medicare Qualified Government Employment (MQGE) Many government employees (city, state and federal) pay only the Medicare portion of the FICA taxes. MQGE entitlement essentially deems an individual lacking insured status to be entitled to retirement and disability benefits, but only for the purpose of determining entitlement to Medicare (See Sections 226(b)(1) and (2)(C) of the Social Security Act). QCs for this type of coverage may appear on a separate portion of the earnings record or may be listed as a MQGE. These individuals are not insured for Title II cash benefits. However, they are insured for Medicare benefits under Title XVIII of the Act. The requirements and application process for Medicare insurance for these disabled individuals are the same as for individuals who are entitled to disability benefits under Title II of the Act. These individuals must meet the insured status requirements for disability based on Medicare QCs for entitlement to Medicare coverage. These individuals must meet the same definition of disability as required for disability benefits under Title II set out in section 223 of the Act to establish entitlement to Medicare coverage. A determination is made regarding the individual s disability under Section 223 of the Act for deemed entitlement to determine their entitlement to Medicare based on Medicare Qualified Government Employment under Section 226 of the Act. EXERCISE

True or False 1. An individual must be fully and currently insured to qualify for any benefits paid under Title II. 2. Title II is an entitlement cash program based on quarters of coverage earned and financial needs of the individual. 3. An application for Title II disability has up to five months of retroactivity. 4. An individual must have 40 quarters of coverage to be fully insured. 5. A disabled individual who has worked and acquired quarters of coverage is always entitled to disability benefits. 6. An individual who meets the statutory blindness as defined by SSA must be insured for purposes of entitlement to benefits. Complete the following 7. Compute the date last insured for Joe Smith, who is 49 years old, is fully insured, became disabled on 12/31/01, and had the following earnings from 1995 to 2001. 1995 - $4,410.00 1999 - $739.00 1996 - $1,279.00 2000 - $4,200.00 1997 - $5,000.00 2001 - $3,600.00 1998 - $3,200.00 8. To be credited with four QCs in 1999, an individual must have earned at least. 9. Name the major differences between TII and TXVI. EXERCISE ANSWERS 1. False An individual must be fully and currently insured to qualify for disability benefits. 2. False. Only benefits under Title XVI consider the financial circumstances of the individual. 3. False Title II applications for disability benefits may be retroactive for a period of up to 12 months. However, there is a five-month waiting period before the commencement of disability insurance benefits. 4. False It depends on the age of the individual. 5. False Must meet the specific insured status requirements. 6. fully insured 7. June 30, 2005 8. $2,960.00 9. Entitlement/ means-tested, retroactivity, waiting period, insured status requirements, dependent/survivor benefits, income/resource requirements EXHIBIT 1: MAJOR DIFFERENCES BETWEEN TITLE II & TITLE XVI Title II Title XVI Entitlement program based on contributions made to the Federal Insurance Contribution Act (FICA) Means-tested program Up to 12 months of retroactivity No retroactivity-no benefits before the month following the month in which the

application was filed Five month waiting period No waiting period Insured status requirement Insured status not material Dependents / survivors benefits Payments made only to the aged, disabled or blind individual Income and resources not material Must meet income and resource(s) limits EXHIBIT 2: SYMBOLS ON AN EARNINGS RECORD C Covered wage quarter N No covered quarter G Gift (prior earnings in other quarter) S Self-employment quarter of coverage # Questionable QC may indicate that postings are less than $50. Must not be used to compute insured status unless development is undertaken and proof obtained to show the earnings were of a sufficient amount for crediting a QC. R Railroad employment M Military service A Agricultural quarter of coverage * QC for which an S, A, M, or G code may be substituted L Lag Period (time between filing of tax returns and when Social Security is credited with the FICA based earnings) J QC based on deemed wages for interned Americans of Japanese ancestry D QC based on deemed military wages that guarantee a QC for a quarter $ May appear in the QC pattern to denote a good QC MQGE May appear as separate section QCs for Medicare Qualified Government Employment reflects insured status for Medicare coverage only. EXHIBIT 3: AMOUNTS REQUIRED FOR A QUARTER OF COVERAGE (QC) Year Amount for QC Amount for 4 Qs 1978 $250 $1,000 1979 $260 $1,040 1980 $290 $1,160 1981 $310 $1,240 1982 $340 $1,360 1983 $370 $1,480 1984 $390 $1,560 1985 $410 $1,640 1986 $440 $1,760 1987 $460 $1,840 1988 $470 $1,880 1989 $500 $2,000

1990 $520 $2,080 1991 $540 $2,160 1992 $570 $2,280 1993 $590 $2,360 1994 $620 $2,480 1995 $630 $2,520 1996 $640 $2,560 1997 $670 $2,680 1998 $700 $2,800 1999 $740 $2,960 2000 $780 $3,120 2001 $830 $3,320 2002 $870 $3,480 2003 $890 $3,560 2004 $900 $3,600 2005 $920 $3,680 2006 $970 $3,880 2007 $1000 $4,000 2008 $1,050 $4,200