What is the test for denial of disability benefits under the Social Security Act?

In determining the eligibility of applicants for disability benefits under Title II or Title XVI of the Act, the Secretary uses a five-step sequential evaluation process, of which the severity regulations are a part. Under this process, only certain types of evidence are considered at each step of the evaluation. At issue in the present case is step 2; a failure to meet the disability criteria set by step 2 results in a denial of benefits without proceeding to any later step. In City of New York v. Heckler, 742 F.2d 729, 732 (2d Cir.1984), cert. granted, --- U.S. ----, 106 S.Ct. 57, 88 L.Ed.2d 46 (1985), we described the process as follows:

The first step in the sequential process is a decision whether the claimant is engaged in "substantial gainful activity." If so, benefits are denied. 20 C.F.R. Secs. 404.1520(a), (b), 416.920(a), (b) (1983). If not, the second step is a decision whether the claimant's medical condition or impairment is "severe." If not, benefits are denied. 20 C.F.R. Secs. 404.1520(c), 416.920(c). If the impairment is "severe," the third step is a decision whether the claimant's impairments meet or equal the "Listing of Impairments" set forth in subpart P, app. 1, of the social security regulations, 20 C.F.R. Secs. 404.1520(d), 416.920(d). These are impairments acknowledged by the Secretary to be of sufficient severity to preclude gainful employment. If a claimant's condition meets or equals the "listed" impairments, he or she is conclusively presumed to be disabled and entitled to benefits. If the claimant's impairments do not satisfy the "Listing of Impairments," the fourth step is assessment of the individual's "residual functional capacity," i.e., his capacity to engage in basic work activities, and a decision whether the claimant's residual functional capacity permits him to engage in his prior work. If the residual functional capacity is consistent with prior employment, benefits are denied. 20 C.F.R. Secs. 404.1520(d), 416.920(e). If not, the fifth and final step is a decision whether a claimant, in light of his residual functional capacity, age, education, and work experience, has the capacity to perform "alternative occupations available in the national economy." Decker v. Harris, 647 F.2d 291, 298 (2d Cir.1981); 20 C.F.R. Secs. 404.1520(f), 416.920(f). If not, benefits are awarded.