How to Insure Your Income: Trial Work Period

The Social Security Administration also has established a trial work period as an incentive for rehabilitation and/or attempts to return to work. This means a person may return to work on a trial basis while continuing to receive Social Security benefits.

If a disabled worker refuses rehabilitation without a just reason, benefits may cease.

A just reason for refusal could be that the suggested rehabilitation violates religious beliefs or similar closely held personal convictions.

Generally, disability income benefits cease at the earliest of:

• the end of the second month after the disability ceases;
• the month prior to attainment of age 65; or
• the month prior to the worker's death.

Benefits also may terminate if it is determined by Social Security that there has been substantial medical improvement in your condition or there is evidence that although the condition may not have improved, you are now able to perform occupational duties due to physical or vocational rehabilitation.

This discretion gives the Social Security Administration the ability to enforce its trial work and return-to-work guidelines.

The 1993 federal court decision Michael Mulderig v. Louis W. Sullivan, Secretary of Health and Human Services, dealt with the Social Security Act's definition of disability and a loophole in the law's treatment of trial work periods.

Mulderig had filed an application for disability insurance benefits in May 1989, claiming that he was disabled as a result of an injury he sustained in June 1988 while serving as a New York City firefighter.

But, after Mulderig filed for disability, the case took a strange turn. He returned to work less than a month later. Despite his return to work, Mulderig claimed that he was disabled as defined by the Social Security Act.

The act defines disability as an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months."

Mulderig's application was denied both initially and upon reconsideration. An administrative law judge considered his case and ruled that he was not disabled. An appeals council denied Mulderig's request for review. So, he sued in federal court.

According to Mulderig, the Social Security Act entitled him to a trial work period. Therefore, his return to work should not have been considered in determining his eligibility for benefits.

Sullivan's office argued that Mulderig had not satisfied the statutory definition of disability because his return to work less than 12 months after his injury demonstrated an ability to engage in substantial gainful activity. The Feds further argued that only people who had been judged disabled and awarded benefits were eligible for a trial work period. Any other position would be "administratively unworkable."

The court considered Mulderig's argument seriously:

... According to the Act, "any services rendered by such individual during a period of trial work shall be deemed not to have been rendered by such individual in determining whether his disability has ceased in a month or during such period."

... A claimant's eligibility for a trial work period turns on whether he is entitled to benefits and not on whether he is actually receiving them. As the Act states, a claimant is eligible "beginning with the month in which he becomes entitled to disability insurance benefits." Therefore, if a claimant has filed an application, and has been disabled for five months from an impairment which is expected to last for at least 12 months, he is "entitled" to benefits and, in turn, a trial work period.

... the language of the Act does not suggest that an individual has to be adjudged disabled and actually receiving benefits to be entitled to a trial work period.

The court ruled that the trial work period as defined by the Social Security Act was a "remedial statute to be broadly construed and liberally applied." It was meant to encourage individuals with disabilities to attempt to rejoin the work force.

In reaching this conclusion, the court cited another federal decision which had held that:

... limiting the trial work period to those receiving benefits, although administratively convenient, is inequitable: A claimant whose claim was filed in an overloaded SSA office or was handled by an incompetent employee would be unable to engage in trial work for years, while another would be able to do so within five months of the onset of disability.

The court in Mulderig's case finally ordered the government to reconsider his application:

... [It] must now consider whether Mulderig suffered under an impairment that was reasonably expected to last 12 months and whether he had been disabled for five months at the time he returned to work.

If he was eligible for a trial work period at the time he commenced work, then his work for nine months thereafter cannot be considered in determining his eligibility for disability insurance benefits.