## Facts

- Joseph A. Iamarino applied for Social Security disability benefits.
- Iamarino participated in Goodwill Industries “sheltered” work programs, including a work evaluation program and transitional employment.
- The agency treated Iamarino’s Goodwill earnings as substantial gainful activity (SGA) and found him not disabled before October 29, 1982.
- A central dispute concerned whether Iamarino’s Goodwill work, particularly before April 14, 1982, reflected an ability to perform competitive work or instead occurred under special, rehabilitative conditions (e.g., close supervision and accommodated productivity standards).
- The district court affirmed the Secretary’s decision.

## Issues

1. Whether substantial evidence supported the Secretary’s finding that Iamarino engaged in SGA through Goodwill sheltered-work programs during the period prior to April 14, 1982.
2. Whether the Secretary could rely primarily on earnings levels to establish SGA in a sheltered-work setting without evaluating the special conditions of the work and whether wages were subsidized or not representative of competitive employment.

## Decision

- The Eighth Circuit reversed the district court insofar as it upheld the Secretary’s SGA finding for the period prior to April 14, 1982.
- The court held the SGA determination for that period was not supported by substantial evidence on the record as a whole.
- The court remanded for further proceedings requiring consideration of the sheltered nature of the employment and related qualitative factors, not just earnings.

## Legal Principles

- Earnings above regulatory guidelines may create a presumption of SGA, but the presumption is rebuttable, particularly for sheltered or specially structured employment.
- In assessing SGA for sheltered work, the agency must consider record evidence about the actual nature of the work, including special conditions, supervision, productivity expectations, and whether wages reflect subsidy or therapeutic goals rather than competitive pay.
- Substantial-evidence review requires evaluation of the whole record; a decision cannot be affirmed by relying only on evidence favoring the agency while disregarding material evidence about the claimant’s work setting and limitations.

## Conclusion

The Eighth Circuit required a non-mechanical SGA analysis for sheltered employment, holding that pre–April 14, 1982 Goodwill earnings did not, without more, provide substantial evidence of substantial gainful activity and remanding for reconsideration consistent with that approach.


Iamarino v. Heckler, 795 F.2d 59 (8th Cir. 1986)