[Federal Register Volume 64, Number 30 (Tuesday, February 16, 1999)]
[Proposed Rules]
[Pages 7559-7561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3677]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404 and 416
[Regulations No. 4 and 16]
RIN 0960-AE98
Old-Age, Survivors, and Disability Insurance and Supplemental
Security Income for the Aged, Blind, and Disabled; Substantial Gainful
Activity Amounts
AGENCY: Social Security Administration.
ACTION: Notice of proposed rulemaking.
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SUMMARY: These proposed rules would raise from $500 to $700 the average
monthly earnings guidelines used to determine whether work done by
persons with impairments other than blindness is substantial gainful
activity (SGA) for purposes of Social Security disability benefits
provided under title II of the Social Security Act (the Act) and
Supplemental Security Income (SSI) benefits based on disability under
title XVI of the Act. (Eligibility for benefits under titles II and XVI
also confers eligibility for related Medicare and Medicaid benefits
under titles XVIII and XIX of the Act.) We propose to revise this level
as part of efforts to encourage individuals with disabilities to
attempt to work, and to provide an updated indicator of when earnings
demonstrate the ability to engage in SGA. The proposed increase
reflects our assessment of the amount which roughly corresponds to wage
growth since the last increase in 1990.
DATES: In order to be considered, we must receive your comments on the
specific proposal to increase the amount of the earnings guidelines, by
March 18, 1999.
Note: Under the heading ``Additional Items,'' we ask for more
general suggestions concerning work incentive provisions and how
best to review and revise guidelines in the future. We will accept
these suggestions until April 19, 1999.
ADDRESSES: Comments should be submitted in writing to the Commissioner
of Social Security, P.O. Box 1585, Baltimore, MD 21235; sent by telefax
to (410) 966-2830; sent by E-mail to ``[email protected]''; or
delivered to the Office of Process and Innovation Management, Social
Security Administration, L2109 West Low Rise, 6401 Security Boulevard,
Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on regular
business days. Comments may be inspected during these same hours by
making arrangements with the contact person shown below.
FOR FURTHER INFORMATION CONTACT: Jack Baumel, Office of Disability,
Social Security Administration, 6401 Security Boulevard, Baltimore,
Maryland 21235, (410) 965-9834 or TTY (410) 966-6210.
SUPPLEMENTARY INFORMATION:
Background
Under 20 CFR 404.1572 and 416.972, the term ``substantial gainful
activity'' means work activity that involves significant physical or
mental effort 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. Sections 223(d)(4)(A) and
1614(a)(3)(E) of the Act require the Commissioner to prescribe by
regulations the criteria for determining when earnings demonstrate an
individual's ability to engage in SGA.
These proposed rules would increase the amount in the monthly
earnings guidelines used in determining whether an individual's work
activities demonstrate that he or she is able to perform SGA. Under the
current guidelines in Secs. 404.1574 and 416.974, if a person claiming
title II or title XVI benefits or receiving title II benefits based on
disability had earnings from work activities as an employee (including
as an employee of a sheltered workshop or comparable facility) that
averaged more than $500 a month, we would ordinarily consider that the
person had engaged in SGA. Under the proposed rules, the $500 amount
would be raised to $700 per month.
The amount of average monthly earnings that ordinarily demonstrates
SGA has not been increased since January 1, 1990. We are revising this
level now after reassessing the current guidelines as part of our
effort to improve incentives to encourage individuals with disabilities
to attempt to work. We believe that the increase in the amount of
earnings that constitutes SGA would provide an updated indicator of
when earnings demonstrate the ability to engage in SGA and would be a
significant improvement to the existing work incentive provisions.
Proposed Regulations
We propose to revise Secs. 404.1574(b) (2) and (4), and 416.974(b)
(2) and (4) to increase from $500 to $700 the earnings guidelines that
we use to determine whether a non-blind employee is engaging in SGA.
(This standard would also be applied to the self-employed in certain
circumstances by cross-references now present in Secs. 404.1575 and
416.975.) We have not raised the SGA earnings amount for approximately
nine years. We are proposing to raise the SGA level now to $700, which
roughly corresponds to wage growth since the last increase in 1990.
Additional Items
While these proposed rules would make specific increases to the
amount of earnings that will ordinarily show that a person has engaged
in SGA, we will, at a future point, consider making other changes in
this area as well. Therefore, we invite the public to provide us with
general suggestions for changes which might be desirable in related
provisions (e.g., the trial work period services amount, and the
earnings level that ordinarily demonstrates that an individual has not
engaged in SGA). We also request suggestions reviewing and revising SGA
guidelines in the future. Please note that, in order to be considered,
we must receive comments on the specific provisions in these proposed
rules by March 18, 1999. However, we will accept general suggestions on
the ``additional items'' mentioned in this paragraph if they are
received by April 19, 1999.
[[Page 7560]]
Electronic Version
The electronic file of this document is available on the Federal
Bulletin Board (FBB) at 9:00 A.M. on the date of publication in the
Federal Register. To download the file, modem dial 202-512-1387. The
FBB instructions will explain how to download the file and the fee.
This file is in WordPerfect and will remain on the FBB during the
comment period.
Regulatory Procedures
Justification for 30-day Comment Period
Executive Order 12866 states that, in most cases, an agency should
provide a 60-day period for comments on its proposed rules. We
ordinarily provide a 60-day period. However, for these proposed rules
we are providing a 30-day comment period. As these proposed rules would
increase the scope of disability eligibility for Old-age, Survivors and
Disability Insurance and SSI benefits, as well as for related Medicare
and Medicaid benefits, we believe it is in the public interest to
proceed quickly to advance this change. In this way, this important
change could have an impact at the earliest date practicable. However,
it remains important to us to consider public comments on the proposal.
Therefore, we are establishing a 30-day comment period.
Paperwork Reduction Act
These regulations impose no new reporting/record-keeping
requirements necessitating clearance by OMB.
Executive Order 12866
Regulatory Impact Analysis
Introduction--Based on the costs associated with these proposed
rules, the Social Security Administration has determined that they
require an assessment of costs and benefits to society per Executive
Order 12866 because they meet the definition of a ``significant
regulatory action.'' These proposed rules also meet the definition of a
``major rule'' under 5 U.S.C. 801ff., and this assessment also fulfills
the requirements of those provisions as well. In addition, SSA has
determined, as required under the aforementioned statute, that these
regulations do not create any unfunded mandates for State or local
entities pursuant to sections 202-205 of the Unfunded Mandates Act of
1995. The Office of Management and Budget has reviewed this proposed
rule.
Executive Order 12866 includes in its definition of a ``significant
regulatory action'' one which generates a major increase in costs for
the Federal government. Accordingly, a discussion follows of the effect
of the regulations and general information on estimated costs and
benefits to society.
Nature of the Program--Benefits to disabled and blind individuals
are provided under title II and title XVI of the Act. Disability is
defined under both programs as, ``* * * inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment * * *.'' Related medical benefits to
disabled and blind individuals are provided under title XVIII and title
XIX of the Act.
We use earnings guidelines to evaluate a person's work activity to
determine whether the work activity is SGA and therefore whether that
person may be considered disabled under the law. While this is only one
of the tests used to determine disability, it is a critical threshold
in disability evaluation. We evaluate the work activity of persons
claiming or receiving disability benefits under title II of the Act and
that of persons claiming benefits because of a disability under title
XVI of the Act. These proposed regulations would increase the amounts
of those earnings guidelines. We have not raised the SGA earnings
amount for approximately nine years. We are proposing to raise it now
to approximate wage growth during that time.
Intended Effect--We expect that the increase in the amount of
earnings that constitute SGA would provide a greater incentive for many
beneficiaries to attempt to work or, if already working, to continue to
work or increase their work effort. Hundreds of thousands of
beneficiaries already work and could be advantaged by the proposed
revisions. For these individuals, as well as those not now working, the
proposed revisions could enhance their potential to participate in the
workforce, and, as a consequence, improve their economic well-being by
increasing their income through earnings.
In addition, the increase would permit some individuals with
disabilities who have earnings in excess of the current regulatory
limit ($500) but less than the amount in these proposed rules ($700),
to receive benefits. We estimate that by 2004, an additional 27,000
individuals who would not otherwise be receiving benefits will do so as
a result of these changes. This estimate is based on analyses of the
earnings distributions of a representative sample of disabled
individuals.
The following chart provides the estimated increases in Old-age,
Survivors and Disability Insurance payments, Federal SSI payments,
Medicare benefits, and Federal share of Medicaid benefits due to the
proposed increase in the SGA amount to $700 in 1999, for fiscal years
1999-2004. (Amounts are in millions.)
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Fiscal year
------------------------------------------------ Total, 1999-
1999 2000 2001 2002 2003 2004 2004
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OASDI.............................................. 10 30 55 75 100 120 390
SSI................................................ 15 20 25 25 30 30 145
Medicare........................................... 10 20 30 50 60 80 250
Medicaid........................................... 40 60 70 75 90 100 435
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Subtotal, all programs......................... 75 130 180 225 280 330 1220
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Notes:
\1\ Totals may not equal sum of rounded components.
\2\ Above estimates based on the assumptions underlying the President's FY 2000 Budget, including the SSA
Actuary's normal assumption of an SGA amount increasing with average wages.
\3\ Estimates for Medicare and Medicaid provided by the Office of the Actuary in the Health Care Financing
Administration (HCFA).
In addition, since States share in the costs of financing Medicaid,
States will have some costs associated with the proposed increase in
the SGA as well. These costs are estimated by HCFA to be (in millions):
[[Page 7561]]
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Fiscal year
------------------------------------------------ Total, 1999-
1999 2000 2001 2002 2003 2204 2004
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Medicaid State Share............................... 30 45 55 55 70 75 330
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Although the costs are significant, we consider these changes as
necessary improvements to existing work incentives. The costs of these
regulations would be paid for through programmatic and regulatory
changes.
Regulatory Flexibility Act
We certify that these regulations will not have a significant
economic impact on a substantial number of small entities because they
primarily affect individuals who are applying for or receiving title II
or applying for title XVI benefits because of disability, and States
which administer the Medicaid program.
(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, Death benefits, Disability
benefits, Old-Age, Survivors and Disability Insurance, Reporting and
recordkeeping requirements, Social Security.
20 CFR Part 416
Administrative practice and procedure, Aged, Blind, Disability
benefits, Public assistance programs, Reporting and recordkeeping
requirements, Supplemental Security Income (SSI).
Dated: February 10, 1999.
Kenneth S. Apfel,
Commissioner of Social Security.
For the reasons stated in the preamble, the Social Security
Administration proposes to amend parts 404 and 416 of chapter III of
title 20 of the Code of Federal Regulations as follows:
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950- )
1. The authority citation for subpart P of part 404 continues to
read as follows:
Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a)
and (i), 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) and (i),
422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110
Stat. 2105, 2189.
2. Section 404.1574 is amended by revising paragraph (b)(2)(vi) and
(b)(2)(vii), adding a new paragraph (b)(2)(viii), revising paragraphs
(b)(4)(vi) and (b)(4)(vii) and adding a new paragraph (b)(4)(viii) to
read as follows:
Sec. 404.1574 Evaluation guides if you are an employee.
* * * * *
(b) * * *
(2) * * *
(vi) Your earnings averaged more than $300 a month in calendar
years after 1979 and before 1990;
(vii) Your earnings averaged more than $500 a month after calendar
year 1989 and before (insert first day of the month beginning after 30
days following date of publication of the final rules in the Federal
Register); or
(viii) Your earnings averaged more than $700 a month after (insert
date that is one day earlier than date shown at the end of paragraph
(b)(2)(vii) of this section).
* * * * *
(4) * * *
(vi) Your average earnings are not greater than $300 a month in
calendar years after 1979 and before 1990;
(vii) Your average earnings are not greater than $500 a month after
calendar year 1989 and before (insert first day of the month beginning
after 30 days following date of publication of the final rules in the
Federal Register); or
(viii) Your average earnings are not greater than $700 a month
after (insert date that is one day earlier than date shown at the end
of paragraph (b)(4)(vii) of this section).
* * * * *
PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND AND
DISABLED
1. The authority citation for Subpart I of Part 416 continues to
read as follows:
Authority: Secs. 702(a)(5), 1611, 1614, 1619, 1631(a), (c) and
(d)(1), and 1633 of the Social Security Act (42 U.S.C. 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).
2. Section 416.974 is amended by revising paragraph (b)(2)(vi) and
(b)(2)(vii), adding a new paragraph (b)(2)(viii), revising paragraphs
(b)(4)(vi) and (b)(4)(vii) and adding a new paragraph (b)(4)(viii) to
read as follows:
Sec. 416.974 Evaluation guides if you are an employee.
* * * * *
(b) * * *
(2) * * *
(vi) Your earnings averaged more than $300 a month in calendar
years after 1979 and before 1990;
(vii) Your earnings averaged more than $500 a month after calendar
year 1989 and before (insert first day of the month beginning after 30
days following date of publication of the final rules in the Federal
Register); or
(viii) Your earnings averaged more than $700 a month after (insert
date that is one day earlier than date shown at the end of paragraph
(b)(2)(vii) of this section).
* * * * *
(4) * * *
(vi) Your average earnings are not greater than $300 a month in
calendar years after 1979 and before 1990;
(vii) Your average earnings are not greater than $500 a month after
calendar year 1989 and before (insert first day of the month beginning
after 30 days following date of publication of the final rules in the
Federal Register); or
(viii) Your average earnings are not greater than $700 a month
after (insert date that is one day earlier than date shown at the end
of paragraph (b)(4)(vii) of this section).
* * * * *
[FR Doc. 99-3677 Filed 2-12-99; 8:45 am]
BILLING CODE 4190-29-P