Early Retirement on Social Security and Social Security Disability

A claimant comes into the office.  She is working and is approaching her 62^nd birthday.  The claimant looks healthy, while in fact she is suffering stage four breast cancer.  She wants to retire and try to get social security disability.  What is she to do?

Her appearance - and question, brings up the subject of the relationship between social security disability (SSDI, DIB) and social security retirement.  In the majority of cases, you cannot collect both  i.e. social security disability payments are payable to a worker who is unable to be competitively employed in the national economy because of a disability.  Retirement benefits are for workers (healthy or not) who reach a certain age (depending on their birthday[1]) and decide to apply for retirement benefits. 

There is an exception to the general rule that you cannot collect both benefits.  That exception applies to a worker who takes early retirement i.e. before age 66 years (using the above date of birth) and then applies for and qualifies for disability benefits.

Social security disability benefits pay the disabled worker a benefit that approximates what she would have received at full retirement.  SSDI could be considered as a bridge benefit, benefiting a claimant too young to retire, but disabled.  It would be a worker who has worked and earned benefits from the social security system.  Even though too young for retirement if sufficiently disabled she can get disability benefits that will bridge the period of time from full impairment to full retirement age.

There is some risk to the claimant.  The risk is that by applying for early retirement, she is subject to a permanent reduction in retirement benefits, if she is not found disabled.  In this example, since the claimant retired at age 62, she will experience approximately a 25% reduction in retirement benefits.  This will be a permanent reduction, i.e. at age 66 her full retirement benefit will be 25% less than if she had retired at age 66 years.

If social security finds that the claimant is disabled before full retirement age, here at age 62, social security will make up the difference between the early retirement payments and disability payments for the period of time of the overlap of benefits - up to age 66 years.

If as in this case, early retirement and disability overlap for the full period, disability benefits continue to full retirement with full retirement payments.  If the claimant took early retirement on May 1, XXXX and is found disabled May 1, XXXX the five month waiting period means the first disability payments begin in November XXXX.  When the claimant reaches age 66, she will receive 5 months of reduction in her retirement payments.

 This is a complex area of the law.  It involves retirement issues, medical issues, and financial issues.  If you are in a situation that puts this in question, you need to speak to a financial expert and an experienced attorney working in the area of the law.

Nothing in this blog is intended to establish or create an attorney client relationship.  The blog is conversational and not intended to be taken as legal advice. If any issue in this blog is important to your situation, you need to speak with an attorney and/or a financial specialist.

---

[1] In the case of a worker born in 1949, the minimum age to retire is 62 years of age, full retirement age is 66 etc.

Jail, prison, and social security

What about            

What about a client who gets social security disability benefits and later is incarcerated? What about the client who is injured while incarcerated? What about the client, convicted of a crime, goes to a incarceration facility and escapes?

The start of any inquiry starts with SSR 83-21.

“The law (P.L. 96-473) provides that title II benefits and determinations of disability for prisoners and persons convicted of felonies will be restricted as follows:

1. Any physical or mental impairment which arises or is aggravated (but only to the extent of the aggravation) in connection with the commission of an offense after October 19, 1980, which constitutes a felony under applicable law, and for which the individual is subsequently convicted, shall not be considered in determining whether the individual is under a disability. This exclusion applies regardless of whether the individual is incarcerated pursuant to conviction. (The impairment or aggravation of an impairment must be excluded for the lifetime of the individual.)

2. Any physical or mental impairment that arises or is aggravated (but only to the extent of the aggravation) in connection with the individual's confinement in a jail, prison, or other penal institution or correctional facility pursuant to such individual's conviction of an offense committed after October 19, 1980, constituting a felony under applicable law, shall not be considered in determining whether such individual is under a disability for purposes of benefits payable for any month during which such individual is so confined. If client was injured while in prison. The impairment suffered -- or the worsening of an existing impairment -- while the client was in prison cannot be used to obtain benefits. But the client may be able to obtain benefits after being released from prison.

( If a client is in prison and become disabled, the client can apply for Social Security disability benefits while in jail.  If found disabled benefits will not start to accrue until the client has been disabled for five full calendar months or until the first full calendar month after the client is released, whichever is later.  This makes finding an attorney difficult given the lack of back benefits)

NOTE: The foregoing provisions are applicable to title II claimants: applicants for disability insurance benefits (DIB); for childhood disability benefits (CDB); or for disabled widows, widowers, or surviving divorced spouses benefits (DWB).

3. No monthly benefits shall be paid by reason of being under a disability to any individual for any month during which such individual is confined in a jail, prison, or other penal institution or correctional facility pursuant to conviction for an offense consulting a felony under applicable law, unless the prisoner is actively and satisfactorily participating in a rehabilitation program which has been specifically approved for that prisoner by a court of law, and which as determined by the Secretary is expected to result in the individual being able to engage in substantial gainful activity (SGA) upon release and within a reasonable time. This provision applies to a felony which was committed at any time and is effective for benefits payable for months beginning on or after October 1, 1980; it applies only to DIB and CDB (not DWB) claimants and beneficiaries.

When a prisoner's benefits are suspended, payment of auxiliary benefits will continue to be made (as though the prisoner were receiving benefits) to others who are entitled on the basis of the wages and self- employment income of the prisoner “.

Essentially a claimant's SSI benefits will be suspended after one full month incarceration (unless he participates in a rehabilitation program). Of more significances is the situation where the claimant is incarcerated for 12 months or more. If that takes place, benefits that may have been reinstated without a new disability application, will be lost and a new application would be needed. Similarly SSDI benefits will be suspended after 30 days of incarceration (unless the claimant participates in a rehabilitation program). However, the benefits will be reinstated the month following release.

A claimant who has a past conviction and incarceration on their record, who applies for social security is not eligible to receive any back-benefits for the time period in which he were incarcerated. If the claimant who is receiving disability benefits (also applies to receipt of retirement benefits) commits a felony and is later convicted of the offense, will have any disability payments that he was receiving stopped until such a time as he is released.

If claimant is/was receiving SSDI benefits and has dependents, auxiliary benefits, paid to eligible family members- will continue.

What is incarceration? The easy answer is – claimant is in prison/confinement. What if released to halfway house? What if released to his home with an ankle bracelet? As a general rule if the claimant is living in a situation under government control/expense, SSA will not pay benefits until released from the total control of the Department of Corrections. However, if the claimant is living outside of prison and he is paying his own expenses (food, rent, clothing, utilities, medical care, etc., except for the cost of your ankle bracelet monitoring) he can get Social Security benefits.

W

The ARDUOUS WORK provision i.e.,. 20 CFR § 404.1562; 416.962.

You have a 52 year old worker, disabled and the disability prevents him from working in his prior occupation, which was heavy construction.  He started working when he was 18 years of age and continued until he could no longer work.  This situation brings to mind a seldom used provision of the law.  The  ARDUOUS WORK provision i.e.,. 20 CFR § 404.1562;  416.962.

The foregoing regulations provide that if a claimant has only a marginal education, a work experience of 35 years or more during which the claimant did arduous unskilled physical labor, and the claimant is not working and is no longer able to do the same kind of work because of a severe impairment(s), the SSA will consider the claimant unable to do lighter work and, therefore, disabled.  

What is unique is the provision of law, allows the review to stop at step four, i.e. if he can’t return to prior work, he is disabled without any consideration to lighter work.

There are a number of considerations to the use of this provision of the law.  What is only a marginal education, 20 CFR 404.1564(b)(2).  There is a need for a long work experience (i.e., 35 years or more) and a showing that the claimant only did arduous unskilled physical labor. Does it really apply only to a claimant who has done only unskilled work? (consider SSR 82-63 and Walston v Sullivan, infra)  Lastly, the claimant can no longer do this kind of work in which he was employed in the past 15 years. ( SSA applies § 404.1562 to evaluate whether the claimant is disabled, see 20 C.F.R. §§ 404.1520, 416.920)

In addition to the foregoing there are other considerations.  If you have a hard working individual, suffering but trying to keep food on the table, i.e.  claimant is working or has worked despite the impairment(s) (except where the work is sporadic or is not medically advisable), SSA may review all the facts, and could find that the claimant is not disabled.

Further, the SSA will consider the claimant not disabled if the evidence shows that the claimant has training or past work experience which enables him or her to do substantial gainful activity in another occupation, either on a full-time or a reasonably regular part-time basis.

20 C.F.R. Pt. 404, Subpt. P, App. 2, Medical-Vocational Guidelines, section 202

An individual with a marginal education and long work experience (i.e., 35 years or more) who is limited to the performance of arduous unskilled labor, who is not working and is no longer able to perform such labor because of a severe impairment(s), may still be found disabled even though the individual is able to do medium work.

“ (c) However, for individuals of advanced age who can no longer perform vocationally relevant past work and who have a history of unskilled work experience, or who have only skills that are not readily transferable to a significant range of semi-skilled or skilled work that is within the individual's functional capacity, or who have no work experience, the limitations in vocational adaptability represented by functional restriction to light work warrant a finding of disabled. Ordinarily, even a high school education or more which was completed in the remote past will have little positive impact on effecting a vocational adjustment unless relevant work experience reflects use of such education.

(d) Where the same factors in paragraph (c) of this section regarding education and work experience are present, but where age, though not advanced, is a factor which significantly limits vocational adaptability (i.e., closely approaching advanced age, 50-54) and an individual's vocational scope is further significantly limited by illiteracy or inability to communicate in English, a finding of disabled is warranted.

(e) The presence of acquired skills that are readily transferable to a significant range of semi-skilled or skilled work within an individual's residual functional capacity would ordinarily warrant a finding of not disabled regardless of the adversity of age, or whether the individual's formal education is commensurate with his or her demonstrated skill level. The acquisition of work skills demonstrates the ability to perform work at the level of complexity demonstrated by the skill level attained regardless of the individual's formal educational attainments.”

SSR 82-63 sets forth the required analysis for evaluating whether a claimant meets the requirements of sections 404.1562 and 416.962 of the regulations.

1. An impairment must be severe and prevent the performance of arduous physical labor.
2. An individual’s work history must have lasted for 35 years or more.
3. The work must have been “arduous,” which is defined as primarily physical work requiring a high level of strength or endurance. While arduous work will usually entail physical demands that are classified as heavy, the work need not be described as heavy to be considered arduous. For example, work involving lighter objects may be arduous if it demands a great deal of stamina or activity such as repetitive bending and lifting at a very fast pace.
4. The work must also have been unskilled. Unskilled work consists of simple duties which require little or no judgment and may be learned in a short period of time.
5. The person must have a “marginal education.” A person who has a marginal education may not have attained a level of development in reasoning, arithmetic, and language which would suggest a vocational potential for more than unskilled work. Generally, an individual is considered to have a marginal education if he or she has no more than a sixth grade elementary school education. However, the level of formal education is not conclusive of a person’s vocational competence. The responsibilities and tasks of past employment may demonstrate a higher level of competence than that indicated by his or her formal schooling. Conversely, a person may have attended school beyond the sixth grade, but other evidence may establish capability for reasoning, arithmetic, and language which does not, in fact, exceed the “marginal” criterion.

Note: SSR 82-63 explains that employment in semiskilled or skilled work, which is not isolated, brief and does not result in skill enhancement,  generally would rule out the application of sections 404.1562 and 416.962 of the regulations.

The Eighth Circuit has looked at this issue.  It rejected the claimant’s arguments that he qualified under the ARDUOUS WORK provision under 20 C.F.R. § 404.1562. Smith v. Shalala, 46 F.3d 45, 46-47 (8^th Cir. 1995). The Court reasoned that the claimant completed the eighth grade in school and testified that he could read and do simple calculations, precluding him from being classified as having a “marginal education.” Id. As stated by the Smith court, formal schooling at a sixth grade level or less is a “marginal education” and 7th through 11th grade is termed “limited education.” Id.

The Eighth Circuit rejected the claimant’s argument that the ALJ should have applied the ARDUOUS WORK provision.  Mitchell v. Shalala, 25 F.3d 712, 715 (8^th Cir. 1994).. The court agreed, however, that if newly discovered evidence submitted to the district court supported a finding that the claimant had a “marginal education, the ARDUOUS WORK provision would result in a finding of disability.

The fact that claimant may have performed skilled or semi-skilled work may not preclude the use of the ARDUOUS WORK provision.  Consider Walston v. Sullivan, 956 F.2d 768, 772 (8^th Cir. 1992).Where the record indicated that the skilled and semi-skilled work the claimant performed resulted in no skills which were transferable either to work presently existing in the national economy or to work within the claimant’s present residual functional capacity, the ALJ erred in concluding that the claimant’s previous periods of skilled work precluded a finding of disability under section 404.1562.