[Federal Register Volume 64, Number 47 (Thursday, March 11, 1999)]
[Notices]
[Pages 12205-12207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5979]
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SOCIAL SECURITY ADMINISTRATION
[Social Security Acquiescence Ruling 99-2 (8)]
Kerns v. Apfel; Definition of Highly Marketable Skills for
Individuals Close to Retirement Age--Titles II and XVI of the Social
Security Act
AGENCY: Social Security Administration.
ACTION: Notice of Social Security Acquiescence Ruling.
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SUMMARY: In accordance with 20 CFR 402.35(b)(2), the Commissioner of
Social Security gives notice of Social Security Acquiescence Ruling 99-
2 (8).
EFFECTIVE DATE: March 11, 1999.
FOR FURTHER INFORMATION CONTACT:
Wanda D. Mason, Litigation Staff, Social Security Administration, 6401
Security Boulevard, Baltimore, MD 21235, (410) 966-5044.
SUPPLEMENTARY INFORMATION: Although not required to do so pursuant to 5
U.S.C. 552(a)(1) and (a)(2), we are publishing this Social Security
Acquiescence Ruling in accordance with 20 CFR 402.35(b)(2).
A Social Security Acquiescence Ruling explains how we will apply a
holding in a decision of a United States Court of Appeals that we
determine conflicts with our interpretation of a provision of the
Social Security Act (the Act) or regulations when the Government has
decided not to seek further review of that decision or is unsuccessful
on further review.
We will apply the holding of the Court of Appeals' decision as
explained in this Social Security Acquiescence Ruling to claims at all
levels of administrative adjudication within the Eighth Circuit. This
Social Security Acquiescence Ruling will apply to all determinations or
decisions made on or after March 11, 1999. If we made a determination
or decision on your application for benefits between November 16, 1998,
the date of the Court of Appeals' decision, and March 11, 1999, the
effective date of this Social Security Acquiescence Ruling, you may
request application of the Social Security Acquiescence Ruling to the
prior determination or decision. You must demonstrate, pursuant to 20
CFR 404.985(b)(2) or 416.1485(b)(2), that application of the Ruling
could change our prior determination or decision in your case.
Additionally, when we received this precedential Court of Appeals'
decision and determined that a Social Security Acquiescence Ruling
might be required, we began to identify those claims that were pending
before us within the circuit and that might be subject to
readjudication if an Acquiescence Ruling were subsequently issued.
Because we determined that an Acquiescence Ruling is required and are
publishing this Social Security Acquiescence Ruling, we will send a
notice to those individuals whose claims we have identified which may
be affected by this Social Security Acquiescence Ruling. The notice
will provide information about the Acquiescence Ruling and the right to
request readjudication under the Ruling. It is not necessary for an
individual to receive a notice in order to request application of this
Social Security Acquiescence Ruling to the prior determination or
decision on his or her
[[Page 12206]]
claim as provided in 20 CFR 404.985(b)(2) or 416.1485(b)(2), discussed
above.
If this Social Security Acquiescence Ruling is later rescinded as
obsolete, we will publish a notice in the Federal Register to that
effect as provided for in 20 CFR 404.985(e) or 416.1485(e). If we
decide to relitigate the issue covered by this Social Security
Acquiescence Ruling as provided for by 20 CFR 404.985(c) or
416.1485(c), we will publish a notice in the Federal Register stating
thatwe will apply our interpretation of the Act or regulations involved
and explaining why we have decided to relitigate the issue.
(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; 96.005 -
Special Benefits for Disabled Coal Miners; 96.006 - Supplemental
Security Income.)
Dated: February 26, 1999.
Kenneth S. Apfel,
Commissioner of Social Security.
Acquiescence Ruling 99-2 (8)
Kerns v. Apfel, 160 F.3d 464 (8th Cir. 1998)--Definition of Highly
Marketable Skills for Individuals Close to Retirement Age--Titles II
and XVI of the Social Security Act. 1
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\1\ Although the court of appeals' decision in Kerns concerned
the interpretation of certain provisions of the title II disability
program regulations, the title XVI disability program regulations
contain provisions identical to those at issue in Kerns. Therefore,
this Ruling extends to both title II and title XVI disability
claims.
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Issue: Whether the Social Security Administration (SSA) is required
to find that a claimant close to retirement age (60-64) and limited to
sedentary or light work has ``highly marketable'' skills before
determining that the claimant has transferable skills and, therefore,
is not disabled.
Statute/Regulation/Ruling Citation: Sections 223(d)(2)(A) and
1614(a)(3)(B) of the Social Security Act (42 U.S.C. 423(d)(2)(A) and
1382c(a)(3)(B)); 20 CFR 404.1520(f)(1), 404.1563(d), 404.1566(c),
416.920(f)(1), 416.963(d), 416.966(c); 20 CFR Part 404, Subpart P,
Appendix 2, sections 201.00(f) and 202.00(f); Social Security Ruling
82-41.
Circuit: Eighth (Arkansas, Iowa, Minnesota, Missouri, Nebraska,
North Dakota, South Dakota).
Kerns v. Apfel, 160 F.3d 464 (8th Cir. 1998).
Applicability of Ruling: This Ruling applies to determinations or
decisions at all administrative levels (i.e., initial, reconsideration,
Administrative Law Judge (ALJ) hearing and Appeals Council).
Description of Case: In February 1994, the claimant, Danny C.
Kerns, applied for disability insurance benefits claiming he became
disabled because he suffered from Paget's disease of the right hip.
Following the denial of his application for benefits at both the
initial and reconsideration steps of the administrative review process,
the claimant requested and received a hearing before an ALJ. Mr. Kerns,
who was 61 years old at the time of the hearing, testified that he had
a high school education plus two years of college and had worked as an
embalmer and funeral director for the last 15 to 30 years. He testified
that since 1985 he worked at a funeral home where he conducted
funerals, lifted caskets, and handled accounts payable and accounts
receivable. He also stated that his only formal bookkeeping training
was from an accounting class he took in high school. Mr. Kerns alleged
that the disease rendered him unable to work because it caused constant
pain, interfered with sleep and his ability to concentrate, caused
irritability, and prevented him from sitting or standing for long
periods of time.
The evidence provided at the hearing also included the testimony of
a vocational expert who testified that Mr. Kerns' skills in accounts
receivable and accounts payable were transferable to a variety of
sedentary accounting clerk positions. The vocational expert stated that
Mr. Kerns' skills could be transferred to such positions without
significant vocational adjustment because the work settings, tools and
processes involved in accounting clerk positions would be similar to
those of his former position.
The ALJ issued a decision finding that Mr. Kerns was not disabled
and denied his claim for disability benefits. The ALJ found that,
although Mr. Kerns was unable to return to his past relevant work as a
funeral director, he possessed transferable skills and retained the
residual functional capacity to perform sedentary work.
Mr. Kerns requested Appeals Council review of the ALJ's decision
and the Appeals Council issued a decision finding that Mr. Kerns
retained the residual functional capacity for sedentary work. In
addressing the transferability of Mr. Kerns' skills, the Appeals
Council rejected the need to determine whether Mr. Kerns' accounting
skills were ``highly marketable,'' stating that Mr. Kerns' skills were
transferable because ``no significant vocational adjustment would be
required'' for Mr. Kerns to perform accounting clerk positions. After
finding that the claimant's skills were transferable, the Appeals
Council applied Rule 201.07 of 20 CFR Part 404, Subpart P, Appendix 2,
Table No. 1, which directed a finding that Mr. Kerns was not disabled.
The claimant sought judicial review of SSA's decision in district
court. The district court found substantial evidence on the record as a
whole to support the finding by SSA that Mr. Kerns had the residual
functional capacity to perform sedentary positions and affirmed SSA's
denial of disability benefits. Mr. Kerns appealed to the Court of
Appeals for the Eighth Circuit. On appeal, the claimant contended,
among other things, that SSA was required under its regulations to
determine whether his accounting skills were ``highly marketable''
before deciding that they were transferable and that he was not
disabled.
Holding: The Eighth Circuit noted that Mr. Kerns had satisfied his
burden of proving at step four of the five-step sequential analysis
that his impairment prevented him from performing his past work as a
funeral director, and the burden thus shifted to SSA at step five to
show the existence of other work in the national economy that the
claimant could perform, considering the claimant's residual functional
capacity, age, education and work experience. The court observed that
the way in which a claimant's age affects the determination at this
step is set forth in 20 CFR 404.1563 of the regulations. The court
stated that, as claimants become older, this regulation ``imposes a
progressively more stringent burden'' on SSA before disability benefits
can be denied.2 Section 404.1563(d) states that if a
claimant is of advanced age (55 and over), has a severe impairment, and
cannot do medium work, such claimant may not be able to work unless he
or she has skills that can be transferred to less demanding jobs which
exist in significant numbers in the national economy. In addition,
section 404.1563(d) states that ``[i]f you are close to retirement age
(60-64) and have a severe impairment, we will not consider you able to
adjust to sedentary or light work unless you have skills which are
highly marketable.''
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\2\ Section 404.1563 and the corresponding title XVI regulation,
section 416.963, are entitled ``Your age as a vocational factor.''
Sections 404.1563(b)-(d) and 416.963(b)-(d) specify three age
categories: ``Younger person'' (under age 50); ``Person approaching
advanced age'' (age 50-54); and ``Person of advanced age'' (age 55
or over). The last category includes a subcategory--a person close
to retirement age (age 60-64).
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The court of appeals found that in determining that Mr. Kerns was
not disabled, SSA considered the transferability of his accounting
skills
[[Page 12207]]
by applying the standard set forth in section 201.00(f) of 20 CFR Part
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404, Subpart P, Appendix 2. That section provides:
In order to find transferability of skills to skilled sedentary
work for individuals who are of advanced age (55 and over), there
must be very little, if any, vocational adjustment required in terms
of tools, work processes, work settings, or the industry.
The court of appeals indicated that section 404.1563(d) of the
regulations ``requires something more than a mere determination of
transferability'' for a claimant close to retirement age. Although the
court of appeals noted that section 223(d)(2)(A) of the Act and section
404.1566(c) of the regulations provide that disability is to be
evaluated in terms of a claimant's ability to perform jobs rather than
on his or her ability to obtain them, the court found that ``the
regulations [section 404.1563(a)] also recognize the effect that age
has on a person's ability to compete with other job applicants.''
Section 404.1563(a) states:
Age refers to how old you are (your chronological age) and the
extent to which your age affects your ability to adapt to a new work
situation and to do work in competition with others.
The Eighth Circuit determined that the language of section
404.1563(d) places a higher burden on SSA to show that a claimant with
a severe impairment who is close to retirement age (age 60-64) can
perform other work that exists in the national economy. The court
indicated that under the regulations, ``[s]uch claimants will not be
considered `able to adjust to sedentary or light work unless [they]
have skills which are highly marketable.''' The court held that ``[i]n
the absence of a finding that the skills of a claimant close to
retirement age are highly marketable, those skills cannot be found
transferable.''
Because Mr. Kerns was close to retirement age at the time of the
ALJ hearing, the court of appeals concluded that SSA was required to
find that Mr. Kerns' skills were ``highly marketable'' before it could
find that Mr. Kerns had transferable skills and deny disability
benefits. The Eighth Circuit thereupon reversed the judgment of the
district court with instructions to remand the case to SSA to determine
whether Mr. Kerns' skills were ``highly marketable.''
Statement as to How Kerns Differs From SSA's Interpretation of the
Regulations
At step five of the sequential evaluation process, SSA considers a
claimant's chronological age in conjunction with residual functional
capacity, education and work experience to determine whether a claimant
can do work other than past relevant work. SSA takes into account how
age affects a claimant's ability to adapt to new work situations and do
work in competition with others in the workplace.
To this end, SSA's regulations provide that in order to find that a
claimant whose sustained work capability is limited to light work or
less and who is close to retirement age (60-64) possesses skills that
can be used in (transferred to) other work, ``there must be very
little, if any, vocational adjustment required in terms of tools, work
processes, work settings, or the industry.'' 20 CFR Part 404, Subpart
P, Appendix 2, section 202.00(f). SSA's regulations provide the same
rule for a claimant whose sustained work capability is limited to
sedentary work and who is of advanced age (55 and over). 20 CFR Part
404, Subpart P, Appendix 2, section 201.00(f). If the claimant's skills
are transferable to other work under this standard, SSA will consider
such skills ``highly marketable'' under 20 CFR 404.1563(d) and
416.963(d). SSA's regulations do not require a specific, separate and
distinct finding that a claimant's skills are ``highly marketable'' in
reaching a conclusion that the claimant has transferable skills.
The Eighth Circuit interpreted 20 CFR 404.1563(d) to require SSA to
make an additional finding regarding the marketability of a claimant's
skills in order to determine whether the skills of a claimant close to
retirement age are transferable to sedentary or light work. The court
held that in the absence of a finding by SSA that the skills of such a
claimant are ``highly marketable,'' SSA may not conclude that the
claimant possesses transferable skills.
Explanation of How SSA Will Apply The Kerns Decision Within the Circuit
This Ruling applies only to cases in which the claimant resides in
Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota or South
Dakota at the time of the determination or decision at any level of
administrative review, i.e., initial, reconsideration, ALJ hearing or
Appeals Council review.
In the case of a claimant whose sustained work capability is
limited to sedentary or light work as a result of a severe impairment,
who is close to retirement age (age 60-64), and who has skills, an
adjudicator will make a separate finding regarding the marketability of
the claimant's skills when determining whether the claimant's skills
are transferable to other work under the standard specified in section
201.00(f) or 202.00(f) of 20 CFR Part 404, Subpart P, Appendix 2.
Unless the adjudicator finds that the claimant's skills are ``highly
marketable,'' the adjudicator will conclude that the claimant's skills
are not transferable to other work even if the standard for finding
transferability of skills specified in section 201.00(f) or 202.00(f)
is otherwise met. For purposes of this Ruling, an adjudicator will
consider the claimant's skills to be ``highly marketable'' only if the
skills are sufficiently specialized and coveted by employers as to make
the claimant's age irrelevant in the hiring process and enable the
claimant to obtain employment with little difficulty. In determining
whether a claimant's skills meet this definition of ``highly
marketable,'' an adjudicator will consider:
(1) whether the skills were acquired through specialized or
extensive education, training or experience; and
(2) whether the skills give the claimant a competitive edge over
other, younger, potential employees with whom the claimant would
compete for jobs requiring those skills, giving consideration to the
number of such jobs available and the number of individuals competing
for such jobs.3
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\3\ Although rejecting SSA's interpretation of ``highly
marketable'' skills, the Eighth Circuit in Kerns did not set forth
specific, alternative criteria for determining when a claimant's
skills may be considered ``highly marketable.'' Therefore, in the
absence of a statement by the Eighth Circuit of a specific
definition, we have adopted, for purposes of this Ruling, the
standard articulated in Preslar v. Secretary of Health and Human
Services, 14 F.3d 1107 (6th Cir. 1994), for which we published
Acquiescence Ruling 95-1(6), for determining when the skills of a
claimant close to retirement age may be considered ``highly
marketable.'' Although this standard was not specifically adopted or
discussed by the court in Kerns, the court did cite portions of the
Preslar decision in support of its holding in Kerns.
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SSA intends to clarify the regulations at issue in this case, 20
CFR 404.1563 and 416.963, through the rule making process and may
rescind this Ruling once such clarification is made.
[FR Doc. 99-5979 Filed 3-10-99; 8:45 am]
BILLING CODE 4190-29-F
