## Facts

- Nancy B. McGlocklin applied for a period of disability and disability insurance benefits (DIB) under the Social Security Act.
- Her earnings record showed she was “fully insured,” with a total of forty-seven quarters of coverage.
- To qualify for DIB, she also had to satisfy the insured-status requirement commonly described as the “20/40 rule”: at least 20 quarters of coverage in the 40-quarter period ending with the quarter in which she alleged disability onset.
- In that relevant 40-quarter period, McGlocklin had 19 quarters of coverage.
- She was $1 short of the annual earnings amount required by regulation to obtain an additional quarter of coverage during the relevant period; with that extra dollar, she would have had the needed 20 quarters.
- After a hearing, an Administrative Law Judge (ALJ) found McGlocklin entitled to benefits, treating the $1 shortfall as de minimis and effectively crediting her with an additional quarter of coverage.
- The Appeals Council reopened the ALJ’s favorable decision for good cause, finding the ALJ’s approach was clear error because quarters of coverage are earned only by meeting the regulatory earnings amount.
- The Appeals Council notified McGlocklin of the reopening and allowed her to submit additional evidence and request a hearing; she did not do so.
- The Appeals Council then issued the Commissioner’s final decision denying DIB because McGlocklin lacked insured status (19 quarters instead of 20 in the relevant 40-quarter period).
- McGlocklin sought judicial review in the United States District Court for the Western District of Virginia under 42 U.S.C. § 405(g). A magistrate judge recommended affirmance, McGlocklin objected, and the district judge conducted de novo review of the objections.

## Issues

1. Whether the Appeals Council had authority to reopen the ALJ’s favorable decision for good cause based on an error of law concerning quarters of coverage.
2. Whether the Social Security Act or regulations permit a de minimis or rounding exception that would allow a claimant who is $1 short of the earnings threshold to receive an extra quarter of coverage.
3. Whether the Commissioner’s final decision denying DIB for lack of insured status was supported by substantial evidence and made according to law.

## Decision

- The district court adopted the magistrate judge’s recommendation, overruled McGlocklin’s objections, and affirmed the Commissioner’s final decision denying DIB.
- The court held the Appeals Council properly reopened the ALJ’s decision for good cause because the ALJ committed legal error by crediting an extra quarter of coverage without the required earnings.
- The court held there is no de minimis or rounding rule that allows a quarter of coverage to be awarded when the claimant’s earnings do not meet the regulatory amount.
- Because the undisputed earnings record showed only 19 quarters of coverage in the relevant 40-quarter period, the denial for lack of insured status was supported by substantial evidence.

## Legal Principles

- A claimant must meet the Act’s insured-status requirements before disability can be evaluated for DIB purposes; being “fully insured” does not eliminate the separate requirement of sufficient quarters in the relevant 40-quarter window.
- Quarters of coverage are determined by statute and regulation using fixed earnings thresholds; a quarter may not be credited unless the claimant earned at least the required amount.
- Courts may not create equitable exceptions that change clear, numeric eligibility thresholds set by Congress and implemented by regulation.
- The Appeals Council may reopen an ALJ decision within the regulatory framework for good cause, including to correct clear legal error, and may issue the Commissioner’s final decision after providing notice and an opportunity to respond.
- On review under 42 U.S.C. § 405(g), a district court affirms the Commissioner if the correct legal standards were used and the decision is supported by substantial evidence.

## Conclusion

The court affirmed the denial of disability insurance benefits because McGlocklin did not meet the 20-quarters-in-40 insured-status requirement: being $1 short of the regulatory earnings amount could not be treated as earning an additional quarter of coverage, and the Appeals Council was permitted to reopen and reverse the ALJ’s contrary award to correct that legal error.


McGlocklin v. Chater, 948 F. Supp. 589 (1996)