Exemption of Work Activity as a Basis for a Continuing Disability Review, 66840-66860 [E6-19255]

Agencies

• Social Security Administration

[Federal Register Volume 71, Number 222 (Friday, November 17, 2006)]
[Rules and Regulations]
[Pages 66840-66860]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19255]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Docket No. SSA-2006-0101]
RIN 0960-AE93


Exemption of Work Activity as a Basis for a Continuing Disability 
Review

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: We are publishing these final rules to amend our regulations 
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 title XVI 
(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 
amending our regulations concerning how we determine whether your 
disability continues or ends. These

[[Page 66841]]

revisions will codify our existing operating instructions for how we 
consider certain work at the last two steps of our continuing 
disability review process. We are also revising our disability 
regulations to incorporate 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). In addition, we are amending 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: These rules are effective December 18, 2006.

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 final 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 https://
www.socialsecurity.gov/.

SUPPLEMENTARY INFORMATION: 

Electronic Version Access

    The electronic file of this document is available on the date of 
publication in the Federal Register at https://www.gpoaccess.gov/fr/
index.html.

What is the purpose of these final rules?

    We are revising our disability regulations to carry out section 
221(m) of the Act. The changes will 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 
are revising our rules on when we will start a continuing disability 
review (specifically, a medical continuing disability review or a 
``medical review'') to decide whether you are still disabled. In 
addition, we are amending our rules to provide that, under the medical 
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 are revising 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 persons 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.
    We are also making certain changes to our regulations that may 
apply to you even if you are not affected by section 221(m) of the Act. 
We are clarifying 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 rules will 
codify the 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 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 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 rules affect you if you 
request reinstatement of benefits.
    We are also incorporating 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 revising 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 making some minor clarifications and corrections of other 
rules.

Ticket to Work and Work Incentives Advisory Panel

    During the preparation of these rules, we consulted with the Ticket 
to Work and Work Incentives Advisory Panel.

What do we mean by ``final rules'' and ``existing rules''?

    For clarity, we use the term ``final rules'' in this preamble to 
refer to the changes we are making to our regulations in this 
publication. We also use the term ``new'' or ``amended'' rules to refer 
to these changes. We use the term ``existing rules'' to refer to the 
rules that will be changed by these final rules.

When will we start to use these final rules?

    We will start to use these final rules on their effective date. We 
will continue to use our existing rules until the effective date of 
these final rules.
    As is our usual practice when we make changes to our regulations, 
we will apply these final rules in determinations or decisions that we 
make on or after the effective date of these final rules. When these 
final rules become effective, we will apply them to cases that are 
pending in our administrative review process, including cases on remand 
from a Federal court.

What are continuing disability reviews and when do we start them under 
existing rules?

    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), 
1631(d)(1) and 1633 of the Act, and Sec. Sec.  404.1589 and 416.989 of 
our regulations.) We call this evaluation a continuing disability 
review. There are two main types of continuing disability review: (1) 
Work continuing disability reviews (sometimes referred to as a ``work 
reviews'') in which we mainly examine your earnings, and (2) medical 
continuing disability reviews (sometimes referred to as ``medical 
reviews'') in which we examine your medical improvement and ability to 
function. In Sec. Sec.  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 Sec. Sec.  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

[[Page 66842]]

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 Sec. Sec.  404.1590 and 416.990 of our 
existing regulations.

Under existing rules, 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 Sec.  404.1594 if you 
are a Social Security disability beneficiary and the rules in Sec.  
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 Sec.  404.1594(f), we provide an eight-step 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 Sec. Sec.  404.1594(d) and (e). (Since the exceptions are 
in the statute and are not affected by section 221(m) or the provisions 
of these final rules, 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 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 Sec.  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 Sec.  
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 Sec.  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.

Under existing rules, 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., $860 per 
month for non-blind individuals in 2006), 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 under our existing 
rules generally depends 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

[[Page 66843]]

consider other information in addition to your earnings.
    Example: You worked from July 2000 through June 2001, with earnings 
of $600 per month. We use different criteria for evaluating your work 
activity from January 2001 through June 2001 and from July 2000 through 
December 2000 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 are 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. We consider that 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.

Under existing rules, 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.

Under existing rules, 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 Sec.  
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.

Under existing rules, 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 
Sec.  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 Sec.  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 Sec.  404.1511) for purposes of eligibility for a reentitlement 
period (see Sec.  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 
Sec.  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.

What does section 221(m) of the Act provide?

    Above, we described what typically happens during a continuing 
disability review. However, section 221(m) of the Act provides for 
special exceptions for specified individuals under specific 
circumstances.
    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:
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    \1\ The other monthly insurance benefits based on disability 
under section 202 of the Act are:
     Child's insurance benefits based on disability under 
section 202(d);
     Widow's insurance benefits based on disblity under 
section 202(c); and
     Widower's insurance benefits based on disability under 
section 202(f).
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     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)).

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    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 making, and why?

    As a result of section 221(m) of the Act, we are revising 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 explain how we consider activities from work in 
continuing disability reviews if you are covered by section 221(m); and
     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).
    In addition, we are also revising several of our rules in subparts 
J and P of part 404 and subparts I and N of part 416 of our 
regulations:
     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 clarify how we determine continuing disability at the 
last two steps of the medical improvement review standard sequential 
evaluation process;
     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 making changes to our title 
XVI regulations that will 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 will use the same rules for starting 
continuing disability reviews under title XVI as we will use under 
title II. Also, when we do conduct a continuing disability review, we 
will use the same rules on how we consider the activities from your 
work in a continuing disability review under title XVI as we will use 
in a continuing disability review under title II. If we did not make 
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 making the 
aforementioned changes to the title XVI regulations that will 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 final rules do not extend the provisions of section 221(m) to you 
if you receive only SSI disability or blindness payments.
    We are also revising our disability regulations to include 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 Sec. Sec.  404.1571-404.1576 of our regulations.
    We are also clarifying in these final rules 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 amending our rules to provide a comparable rule if 
you are requesting expedited reinstatement of benefits under section 
223(i) or 1631(p) of the Act. The rule will 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 
making and our reasons for making these changes.

Sections 404.903 and 416.1403 Administrative Actions That Are Not 
Initial Determinations

    We are adding a new paragraph (x) to Sec.  404.903 and a new 
paragraph (a)(22) to Sec.  416.1403 to explain that the action of 
starting or discontinuing a continuing disability review is not an 
initial determination. As explained in existing Sec. Sec.  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 amending our

[[Page 66845]]

rules in Sec. Sec.  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 are revising Sec. Sec.  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 change will 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 discontinuing the use 
of the secondary guidelines altogether.
    Under this 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 work for a small corporation run by a relative).
    Using the facts from the ``Example'' set out earlier, the following 
illustrates how we will evaluate your work activity under these final 
rules, which eliminate the use of the secondary substantial gainful 
activity guidelines altogether. As in the ``Example'' above, you worked 
from July 2000 through June 2001, with earnings of $600 per month. For 
the entire period you worked, your average monthly earnings are less 
than the applicable primary substantial gainful activity amounts ($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). Therefore, we will generally consider that your 
earnings show that you have not engaged in substantial gainful 
activity.
    To make this change, we are eliminating the rules in existing 
Sec. Sec.  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 are replacing existing paragraphs (b)(3) through 
(b)(6) of Sec. Sec.  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 new paragraph (b)(3), we are 
consolidating 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 are extending the scope of 
these rules to cover work performed before January 2001 as well as work 
performed in or after January 2001.
    In a 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 Sec.  404.1574 
or Sec.  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 new paragraph (b)(3)(ii) of Sec. Sec.  404.1574 and 
416.974.
    In 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 working for a 
small corporation owned by a relative).
    We also include provisions in 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 
Sec. Sec.  404.1574 and 416.974. In 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 Sec.  404.1574 
or Sec.  416.974, according to pay scales in your community.
    The provisions of new Sec. Sec.  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 Sec. Sec.  404.1574 and 416.974.
    In new Sec.  404.1574(b)(3)(iii), we explain that, even if the 
circumstances described in new Sec.  404.1574(b)(3)(ii) are

[[Page 66846]]

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 cross-references to the sections of our 
regulations that concern making substantial gainful activity 
determinations for purposes of determining whether your disability has 
ceased.
    Since new paragraphs (b)(3)(ii)(A) and (B) require us to consider 
your work activities, we decided that we could no longer use 
(b)(3)(ii)(A) and (B)--based on section 221(m)(1)(B) of the Act--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. Therefore, in Sec.  404.1574(b)(3), we have included 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, which provides an exception 
to the rule in Sec.  404.1574(b)(3)(ii), discussed above. The exception 
will apply when we are evaluating the work that you perform while you 
are entitled to Social Security disability benefits and after you have 
received such benefits for at least 24 months and will apply to you 
only if you are covered by section 221(m) of the Act. 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 new Sec.  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 new Sec.  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 
Sec.  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, section 221(m)(1)(B) of the Act provides that we 
may not consider information about the activities you perform in that 
work (such as the information described in new Sec.  
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 new Sec.  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. Therefore, after we 
have determined that your disability has ceased during the 
reentitlement period because you performed substantial gainful 
activity, we will continue to 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 Sec.  404.1592a(a)(2) 
and (3)). We may use the tests in Sec.  404.1574(b)(3)(ii) that involve 
looking at your work activities in making these substantial gainful 
activity determinations because these determinations do not involve 
deciding that you are no longer disabled.
    Also, in new Sec.  404.1574(b)(3), we include a paragraph 
(b)(3)(iv), When we consider you to have received social security 
disability benefits for at least 24 months. The provisions of paragraph 
(b)(3)(iv) apply for purposes of new paragraph (b)(3)(iii) of Sec.  
404.1574. In new Sec.  404.1574(b)(3)(iv), we provide a definition of 
Social Security disability benefits and explain when we will consider 
you to have received such benefits for at least 24 months.
    In response to public comments we received on the proposed rules, 
we have modified the criteria relating to the 24-month requirement in 
these final rules. We have modified the criteria in Sec.  
404.1574(b)(3)(iv) of the final rules to provide that, if you are 
otherwise due a social security disability benefit for a month, but we 
withhold your benefit for that month to recover an overpayment, we will 
count that month toward the 24-month requirement. We provide that, in 
this situation, we will consider you to have constructively received a 
social security disability benefit for the month for purposes of the 
24-month requirement. We are making similar changes in final Sec. Sec.  
404.1575(e)(2), 404.1590(i)(2)(i), and 416.990(i)(2)(i), which are 
described later in this preamble.
    In final Sec.  404.1574(b)(3)(iv), 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 actually received Social Security disability 
benefits that you were due or constructively received such benefits. 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 actually or constructively receive benefit payments. 
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 new paragraphs (b)(3)(iii) and (iv) only in our 
revision of Sec.  404.1574(b). We are not including similar provisions 
in our revision of Sec.  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, new paragraph (b)(3) of Sec. Sec.  404.1574 
and 416.974 will replace existing paragraphs (b)(3) through (b)(6) of 
these sections. As a consequence, we have made certain conforming 
changes to existing paragraphs (b)(1) and (2) of Sec. Sec.  404.1574 
and 416.974. We are amending existing paragraph (b)(1) of Sec. Sec.  
404.1574 and 416.974 to remove references to paragraphs (b)(4), (5), 
and (6). We are revising the parenthetical phrase in the introductory 
text of existing paragraph (b)(2) of Sec. Sec.  404.1574 and 416.974 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 are revising our rules in existing Sec.  404.1575 to 
explain how we will evaluate your work activity when

[[Page 66847]]

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 amending our 
rules in Sec.  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 self-employed, 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 will 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 
are revising existing paragraphs (a) and (c) of Sec.  404.1575 and 
adding a new paragraph (e). We are retaining all of the provisions of 
existing paragraph (a). However, we are restructuring the paragraph. We 
made the first two sentences of existing paragraph (a) the introductory 
text of paragraph (a) of final Sec.  404.1575. (We revised the first 
sentence of the paragraph to include a reference to new paragraph (e).) 
We included the remaining provisions of existing paragraph (a) in a new 
paragraph (a)(2), General rules for evaluating your work activity if 
you are self-employed. Because of this change, we redesignated existing 
paragraphs (a)(1), (2), and (3) of Sec.  404.1575 as paragraphs 
(a)(2)(i), (ii), and (iii), respectively, of final Sec.  404.1575.
    Following the first two sentences (the introductory text) of 
paragraph (a) of final Sec.  404.1575, we added a new paragraph (a)(1), 
How we evaluate the work you do after you have become entitled to 
disability benefits. In new Sec.  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 new Sec.  404.1575(a)(1) that we will use the guides in 
new 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 Sec.  
404.1575(a)(2) of these final rules. Section 404.1575(a)(2) of the 
final rules sets out the three tests we currently use to evaluate the 
work of a self-employed person.
    We explain in new Sec.  404.1575(a)(1) that we will use the three 
tests described in Sec.  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 Sec.  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 are revising existing Sec.  404.1575(c). In amended Sec.  
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 amended Sec.  404.1575(c)(2), we explain when we consider 
your countable income to be substantial.
    In new Sec.  404.1575(e), Special rules for evaluating the work you 
do 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 new 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 actually received Social 
Security disability benefits that you were due or constructively 
received such benefits. We explain that we will consider you to have 
constructively received a benefit for a month for purposes of the 24-
month requirement if you were otherwise due a social security 
disability benefit for that month and your monthly benefit was withheld 
to recover an overpayment.
    We explain the new evaluation test in new paragraph (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 Sec.  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 Sec.  404.1574(b)(2) unless the evidence shows 
that you did not render

[[Page 66848]]

significant services in the month(s). If your average monthly countable 
income is equal to or less than the amounts in Sec.  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 added two new paragraphs to existing Sec. Sec.  404.1590 and 
416.990 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 (new paragraph (h)), and if you are covered by the 
provisions of section 221(m) of the Act (new paragraph (i)).
    In new Sec. Sec.  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 Sec. Sec.  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 amendment 
to existing Sec. Sec.  404.1590 and 416.990 is not a change in policy, 
but incorporates rules already set out in Sec. Sec.  411.160 and 
411.165. In addition, we provide in new Sec.  404.1590(h) that this 
provision does not apply to the reviews we do under title II using the 
rules in Sec. Sec.  404.1571-404.1576 to determine whether the work you 
have done shows that you are able to do substantial gainful activity 
(see Sec.  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 new Sec. Sec.  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 new 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 
use the word ``start'' in this provision and the remainder of new 
paragraph (i) of Sec. Sec.  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 Sec. Sec.  404.1590 and 
416.990 use both words. We use the word ``start'' in the opening 
sentence of existing Sec. Sec.  404.1590(b) and 416.990(b) to explain 
when we will do a continuing disability review. We then use the word 
``scheduled'' in existing 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 existing paragraph (b)(11) of Sec.  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 
existing paragraph (b)(11)(ii) of Sec.  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 existing paragraphs (b)(3)-(b)(9) 
of Sec. Sec.  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 new Sec. Sec.  404.1590(i)(2) and 416.990(i)(2), The 24-month 
requirement, we provide rules for determining whether the 24-month 
requirement in new Sec. Sec.  404.1590(i)(1) and 416.990(i)(1) is met. 
In new paragraph (i)(2)(i), we explain that months for which you have 
actually received Social Security disability benefits under title II 
that you were due, or for which you have constructively received such 
benefits, will be counted for the 24-month requirement. The 24 months 
do not have to be consecutive. We explain that we will consider you to 
have constructively received a benefit for a month for purposes of the 
24-month requirement if you were otherwise due a social security 
disability benefit for that month and your monthly benefit was withheld 
to recover an overpayment. We also explain that we do not count months 
for which you were technically ``entitled'' but did not actually or 
constructively receive benefit payments. 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 new Sec. Sec.  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 
new Sec.  404.1590(i)(1) or Sec.  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 new Sec. Sec.  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 new paragraph 
(i)(1) of Sec.  404.1590 or Sec.  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, 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 Sec.  404.1590, we include a new 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 new paragraph (i)(1) of that section 
does not apply to certain reviews we conduct under title II of the Act. 
We explain that paragraph (i)(1) does not apply to the reviews we 
conduct using the rules in Sec. Sec.  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. In 
other words, if section 221(m) of the Act applies to you, we may not be 
able to start a medical continuing disability review, but we can still 
start a work continuing disability review to determine if you are doing 
substantial gainful activity. 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 
amendments to Sec.  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

[[Page 66849]]

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 provide a 
procedure in new Sec. Sec.  404.1590(i)(5) and 416.990(i)(4) 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 new Sec.  404.1590(i)(1) or Sec.  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 amended existing paragraph (a) of Sec. Sec.  404.1590 and 
416.990 to include references to new paragraphs (h) and (i) of these 
sections.

Section 404.1592a The Reentitlement Period

    We amended existing paragraph (a) of Sec.  404.1592a to explain 
when the special rules in amended Sec. Sec.  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 revised existing 
paragraph (a)(3) of Sec.  404.1592a to separate the provisions into two 
lower level paragraphs. We designated the second, third, and fourth 
sentences of existing paragraph (a)(3) as new paragraph (a)(3)(i). We 
designated the fifth, sixth, and seventh sentences of existing 
paragraph (a)(3) as new paragraph (a)(3)(ii).
    We amended existing paragraph (a)(1) of Sec.  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 t