MEMORANDUM OPINION AND ORDER REVERSING COMMISSIONER AND REMANDING FOR FURTHER PROCEEDINGS

JEAN ROSENBLUTH, Magistrate Judge.

I. PROCEEDINGS

Plaintiff seeks review of the Commissioner's final decision denying her application for Social Security disability insurance benefits ("DIB") and Social Security Supplemental Security Income benefits ("SSI"). The parties consented to the jurisdiction of the undersigned U.S. Magistrate Judge pursuant to 28 U.S.C. § 636(c). This matter is before the Court on the parties' Joint Stipulation, filed July 30, 2013, which the Court has taken under submission without oral argument. For the reasons stated below, the Commissioner's decision is reversed and this action is remanded for further proceedings.

II. BACKGROUND

Plaintiff was born on September 22, 1953. (Administrative Record ("AR") 116, 125.) She has a 12th-grade education. (AR 150.) Plaintiff previously worked as a housekeeper, horse trainer, assembler, and cashier. (AR 49-50, 138, 148.) Plaintiff injured her neck in an accident2 in 1999 and stopped working on July 1, 2004, allegedly because of her injury. (AR 41, 147.)

On July 30, 2008, Plaintiff filed applications for DIB and SSI.3 (AR 116-22, 125-28.) She alleged that she had been unable to work since July 1, 2004, because of neck pain, vertigo, and a circulation disorder. (AR 135, 147.) Her applications were denied initially, on September 26, 2008 (AR 53-54, 57-61), and upon reconsideration, on December 17 (AR 55-56).

After Plaintiff's applications were denied, she requested a hearing before an Administrative Law Judge ("ALJ"). (AR 113-15.) A hearing was held on November 5, 2009, at which Plaintiff, who was represented by counsel, and a vocational expert ("VE") testified. (AR 37-52.) On November 12, 2009, the ALJ issued a written decision finding Plaintiff not disabled. (AR 24-36.) On January 29, 2010, Plaintiff requested review of the ALJ's decision and submitted additional evidence to the Appeals Council. (AR 22-23, 241-71.) On January 18, 2011, the Appeals Council incorporated the additional evidence into the record and denied review. (AR 12-15.) On January 20, 2011, Plaintiff submitted further evidence to the Appeals Council. (AR 10, 272-75.) On August 30, 2012, the Appeals Council set aside its earlier decision, considered the additional evidence submitted by Plaintiff, and again denied review. (AR 6-10.) This action followed.

III. STANDARD OF REVIEW

Pursuant to 42 U.S.C. § 405(g), a district court may review the Commissioner's decision to deny benefits. The ALJ's findings and decision should be upheld if they are free of legal error and supported by substantial evidence based on the record as a whole. Id.; Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L. Ed. 2d 842 (1971); Parra v. Astrue, 481 F.3d 742, 746 (9th Cir. 2007). Substantial evidence means such evidence as a reasonable person might accept as adequate to support a conclusion. Richardson, 402 U.S. at 401; Lingenfelter v. Astrue, 504 F.3d 1028, 1035 (9th Cir. 2007). It is more than a scintilla but less than a preponderance. Lingenfelter, 504 F.3d at 1035 (citing Robbins v. Soc. Sec. Admin., 466 F.3d 880, 882 (9th Cir. 2006)). To determine whether substantial evidence supports a finding, the reviewing court "must review the administrative record as a whole, weighing both the evidence that supports and the evidence that detracts from the Commissioner's conclusion." Reddick v. Chater, 157 F.3d 715, 720 (9th Cir. 1996). Moreover, "when the Appeals Council considers new evidence in deciding whether to review a decision of the ALJ, that evidence becomes part of the administrative record, which the district court must consider when reviewing the Commissioner's final decision for substantial evidence." Brewes v. Comm'r of Soc. Sec. Admin., 682 F.3d 1157, 1163 (9th Cir. 2012); see also Taylor v. Comm'r of Soc. Sec. Admin., 659 F.3d 1228, 1232 (9th Cir. 2011). "If the evidence can reasonably support either affirming or reversing," the reviewing court "may not substitute its judgment" for that of the Commissioner. Reddick, 157 F.3d at 720-21.

IV. THE EVALUATION OF DISABILITY

People are "disabled" for purposes of receiving Social Security benefits if they are unable to engage in any substantial gainful activity owing to a physical or mental impairment that is expected to result in death or which has lasted, or is expected to last, for a continuous period of at least 12 months. 42 U.S.C. § 423(d)(1)(A); Drouin v. Sullivan, 966 F.2d 1255, 1257 (9th Cir. 1992).

A. The Five-Step Evaluation Process

The ALJ follows a five-step sequential evaluation process in assessing whether a claimant is disabled. 20 C.F.R. §§ 404.1520(a)(4), 416.920(a)(4); Lester v. Chater, 81 F.3d 821, 828 n.5 (9th Cir. 1995) (as amended Apr. 9, 1996). In the first step, the Commissioner must determine whether the claimant is currently engaged in substantial gainful activity; if so, the claimant is not disabled and the claim must be denied. §§ 404.1520(a)(4)(i), 416.920(a)(4)(i). If the claimant is not engaged in substantial gainful activity, the second step requires the Commissioner to determine whether the claimant has a "severe" impairment or combination of impairments significantly limiting her ability to do basic work activities; if not, a finding of not disabled is made and the claim must be denied. §§ 404.1520(a)(4)(ii), 416.920(a)(4)(ii). If the claimant has a "severe" impairment or combination of impairments, the third step requires the Commissioner to determine whether the impairment or combination of impairments meets or equals an impairment in the Listing of Impairments ("Listing") set forth at 20 C.F.R., Part 404, Subpart P, Appendix 1; if so, disability is conclusively presumed and benefits are awarded. §§ 404.1520(a)(4)(iii), 416.920(a)(4)(iii). If the claimant's impairment or combination of impairments does not meet or equal an impairment in the Listing, the fourth step requires the Commissioner to determine whether the claimant has sufficient residual functional capacity ("RFC")4 to perform her past work; if so, the claimant is not disabled and the claim must be denied. §§ 404.1520(a)(4)(iv), 416.920(a)(4)(iv). The claimant has the burden of proving that she is unable to perform past relevant work. Drouin, 966 F.2d at 1257. If the claimant meets that burden, a prima facie case of disability is established. Id. If that happens or if the claimant has no past relevant work, the Commissioner then bears the burden of establishing that the claimant is not disabled because she can perform other substantial gainful work available in the national economy. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). That determination comprises the fifth and final step in the sequential analysis. §§ 404.1520, 416.920; Lester, 81 F.3d at 828 n.5; Drouin, 966 F.2d at 1257.

B. The ALJ's Application of the Five-Step Process

At step one, the ALJ found that Plaintiff had not engaged in substantial gainful activity since July 1, 2004. (AR 29.) At step two, the ALJ concluded that Plaintiff had the severe impairment of "mild degenerative disc disease of the cervical spine." (Id.) At step three, the ALJ determined that Plaintiff's impairment did not meet or equal any of the impairments in the Listing. (AR 30.) At step four, the ALJ found that Plaintiff had the RFC to perform the full range of medium work.5 (Id.) Based on the VE's testimony, the ALJ concluded that Plaintiff was able to perform her past relevant work as a housekeeper/maid. (AR 31.) Accordingly, the ALJ determined that Plaintiff was not disabled. (Id.)

V. DISCUSSION

Plaintiff alleges that the ALJ erred by (1) failing to find that she had the severe impairment of multiple sclerosis ("MS") and (2) failing to properly assess her credibility.6 (J. Stip. at 3.)

A. The ALJ Did Not Properly Assess Plaintiff's Credibility

Plaintiff argues that the ALJ did not provide clear and convincing reasons to support his credibility determination. (J. Stip. at 18-21, 25-27.) He did not, and his decision must therefore be reversed.

1. Applicable law

An ALJ's assessment of symptom severity and claimant credibility is entitled to "great weight." See Weetman v. Sullivan, 877 F.2d 20, 22 (9th Cir. 1989); Nyman v. Heckler, 779 F.2d 528, 531 (9th Cir. 1986). "[T]he ALJ is not required to believe every allegation" of disability, or else disability benefits would be available for the asking, a result plainly contrary to 42 U.S.C. § 423(d)(5)(A)." Molina v. Astrue, 674 F.3d 1104, 1112 (9th Cir. 2012) (internal quotation marks and citation omitted). In evaluating a claimant's subjective symptom testimony, the ALJ engages in a two-step analysis. See Lingenfelter, 504 F.3d at 1035-36. "First, the ALJ must determine whether the claimant has presented objective medical evidence of an underlying impairment [that] could reasonably be expected to produce the pain or other symptoms alleged." Id. at 1036 (internal quotation marks omitted). If such objective medical evidence exists, the ALJ may not reject a claimant's testimony "simply because there is no showing that the impairment can reasonably produce the degree of symptom alleged." Smolen, 80 F.3d at 1282 (emphasis in original). When the ALJ finds a claimant's subjective complaints not credible, the ALJ must make specific findings that support the conclusion. See Berry v. Astrue, 622 F.3d 1228, 1234 (9th Cir. 2010). Absent affirmative evidence of malingering, those findings must provide "clear and convincing" reasons for rejecting the claimant's testimony. Lester, 81 F.3d at 834. If the ALJ's credibility finding is supported by substantial evidence in the record, the reviewing court "may not engage in second-guessing." Thomas, 278 F.3d at 959.

2. Background

In an undated Disability Report, Plaintiff reported that her ability to work was limited by a "neck injury" and "circulation problems and vertigo." (AR 147.) She claimed that she could not "stand or move well or even eat due to the vertigo" and could not get out of bed on "many days." (Id.) She stated that she had not been seen by a doctor, hospital, clinic, or anyone else for treatment of her condition (AR 149), but she claimed that it was because "I have no medical insurance so I have not had any medical care; I have just been suffering for years now" (AR 151). She went on to state:

(Id.)

At the hearing, Plaintiff's attorney questioned her about her work history, health, and daily activities. (AR 39-49.) Plaintiff testified that for the past 10 years, since she was in "[a] rollover car accident," she had suffered from pain in her head, dizziness, nausea, and balance and coordination problems. (AR 41.) She claimed that the pain had gotten progressively worse since her accident, and it felt like "my head is in a vice [sic]." (Id.) She stated that the pain "crawl[ed] down her face," made her "lose control," and caused symptoms such as "the vertigo, dizziness, the nausea, throw up." (AR 41-42.) She claimed that the pain was present "[a]ll the time" and never went away. (AR 42.) She stated that when the pain was "really bad," her vertigo got "worse," she had trouble walking and balancing, and she "f[e]ll easily." (AR 43.) She claimed that sometimes she was not able to walk and had to "crawl around on the floor." (Id.) Her vertigo also caused her to throw up and made it difficult to focus. (AR 44.) Plaintiff testified that she got acupuncture to treat her pain, which helped "a little bit," but she had not had acupuncture "since [her] retirement money was stolen" (AR 42); later, however, she testified that she had had acupuncture the day before the hearing (AR 44), although she intimated that she had not had to pay for it (AR 43). The ALJ did not inquire as to Plaintiff's ability to pay for treatment; indeed, he did not question Plaintiff at all. (See AR 39-49.)

3. Analysis

The ALJ made the following findings as to Plaintiff's credibility:

The absence of ongoing medical treatment is also inconsistent with her allegation of disabling functional limitations secondary to pain, and with a worsening in her condition. It is reasonable to assume that were the claimant in as bad shape as she alleged, she would have sought some treatment to help alleviate her pain. She is not currently participating in physical therapy, she does not use a TENS unit and has not been prescribed a brace, cane or walker. She also denied taking any medications [(AR 188-94)].

I find, therefore, that the evidence as a whole shows that her subjective complaints are not sufficiently credible to require me to accept her allegation of excess pain and limitations. Accordingly, I will rely upon the objective medical evidence which indicates an ability to do medium exertion work activity.

(AR 30-31.) The ALJ then found that Plaintiff had the RFC to perform the full range of medium work. (AR 31.) In making his RFC finding, the ALJ found that Plaintiff's testimony did not establish greater limitations "because her statements are not entirely credible." (Id.) He made the following additional findings as to her credibility:

(Id.)

In determining credibility, an ALJ may consider "unexplained or inadequately explained failure to seek treatment or to follow a prescribed course of treatment." Molina, 674 F.3d at 1112 (citation and internal quotation marks omitted); see also Orn v. Astrue, 495 F.3d 625, 638 (9th Cir. 2007) ("[I]f a claimant complains about disabling pain but fails to seek treatment, or fails to follow prescribed treatment, for the pain, an ALJ may use such failure as a basis for finding the complaint unjustified or exaggerated."). But an ALJ "must not draw any inferences about an individual's symptoms and their functional effects from a failure to seek or pursue regular medical treatment without first considering any explanations that the individual may provide, or other information in the case record, that may explain infrequent or irregular medical visits or failure to seek medical treatment." SSR 96-7p, 1996 WL 374186, at *7. "[D]isability benefits may not be denied because of the claimant's failure to obtain treatment he cannot obtain for lack of funds." Orn, 495 F.3d at 638 (internal quotation marks, alteration, and citation omitted).

Plaintiff stated in her Disability Report that she did not seek treatment because she had "no medical insurance." (AR 151.) At the hearing, Plaintiff also alluded to not being able to afford treatment. (See AR 42, 43.) Plaintiff's lack of insurance could have explained her failure to seek treatment, but the ALJ did not question Plaintiff about it during the hearing, nor did he seek an explanation for it at any other time. Indeed, he didn't mention it in his decision. It is possible the ALJ found Plaintiff's explanation not credible, particularly given that she told the consulting examiner, Dr. Barry Gwartz, that she did not seek treatment because "I don't want to see doctors, I stay away from them." (AR 188.) But the Court cannot make that determination based on the record before it. See Bray v. Comm'r of Soc. Sec. Admin., 554 F.3d 1219, 1225 (9th Cir. 2009) (district court must "review the ALJ's decision based on the reasoning and factual findings offered by the ALJ — not post hoc rationalizations that attempt to intuit what the adjudicator may have been thinking"). The ALJ's adverse credibility finding based on Plaintiff's failure to seek treatment was thus improper because nothing in the record shows that he considered her alleged inability to afford treatment. See SSR 96-7p; Orn, 495 F.3d at 638.7

Because the majority of the ALJ's credibility finding was premised on Plaintiff's failure to seek treatment (see AR 30-31), the Court cannot say that the error was harmless. Cf. Schow v. Astrue, 272 F. App'x 647, 652-53 (9th Cir. 2008) (holding that ALJ's reasons for rejecting plaintiff's credibility not supported by substantial evidence when "at least five" of eight reasons not supported by record). Moreover, the ALJ's other stated reasons for rejecting Plaintiff's credibility — that her testimony conflicted with her daily activities and the medical evidence of record — may not have been clear and convincing.

The ALJ found that Plaintiff's testimony was not credible in part because she took the bus to her consultative evaluation, drove a car, and "gets on the computer, does some laundry, prepared meals, grocery shopped and visited her neighbor." (AR 31.) But Plaintiff testified that she did not cook at all except for making "cereal or something easy"; drove a car "maybe once a month" for a block and did not feel comfortable driving more because of her dizziness; did only "a little bit" of laundry; used the computer for "about an hour" at most; and visited her neighbor only two or three times a week for approximately one hour to check on him because he had had a kidney transplant. (AR 45-48.) The ALJ did not explain why Plaintiff's engaging in very occasional activities meant that she was not usually dizzy or in pain. His evaluation of Plaintiff's daily activities in relation to her subjective symptom testimony was thus not supported by substantial evidence. See Vertigan v. Halter, 260 F.3d 1044, 1050 (9th Cir. 2001) (noting that "[t]his court has repeatedly asserted that the mere fact that a plaintiff has carried on certain [limited] daily activities . . . does not in any way detract from her credibility as to her overall disability," "[o]ne does not need to be `utterly incapacitated' in order to be disabled," and a claimant "may do these activities despite pain for therapeutic reasons, but that does not mean she could concentrate on work despite the pain or could engage in similar activity for a longer period given the pain involved"); Moya v. Astrue, No. EDCV 10-01584-JEM, 2011 WL 5873035, at *8 (C.D. Cal. Nov. 22, 2011) (reversing ALJ's decision because his evaluation of plaintiff's daily activities did not address important evidence in record and activities cited were "not inconsistent" with Plaintiff's alleged symptoms).

The ALJ's finding that Plaintiff's subjective symptoms were not consistent with the medical evidence of record also cannot support his credibility determination because, as explained below, he did not consider Plaintiff's subsequent diagnosis of MS and most likely downplayed her symptoms potentially attributable to it because it had not yet been diagnosed at the time of his decision.

Thus, the ALJ's decision must be reversed and this matter remanded for further proceedings. On remand, the ALJ should inquire as to the reasons for Plaintiff's failure to seek treatment, and, if he finds her proffered reasons unpersuasive, he should state why. He should also explain more fully why Plaintiff's daily activities conflicted with her subjective symptom testimony, should he continue to so find. Finally, he should weigh Plaintiff's credibility in light of her MS diagnosis.

B. Other Issues

Plaintiff argues that the ALJ erred in failing to discuss Plaintiff's diagnosis of MS or find that it was a severe impairment. (J. Stip. at 4-6, 15-18.) Much of Plaintiff's argument centers on the new evidence she submitted to the Appeals Council after the ALJ issued his written decision, which shows that she was diagnosed with MS in 2010. (AR 242-75.)

"New and material evidence" that is "submitted to and considered by the Appeals Council is not new but rather is part of the administrative record properly before the district court." Brewes, 682 F.3d at 1164; see also Tackett v. Apfel, 180 F.3d 1094, 1097-98 (9th Cir. 1999). New evidence is relevant to determining whether the ALJ's decision is supported by substantial evidence "only where it relates to the period on or before the hearing date of the administrative law judge hearing decision." See 20 C.F.R. §§ 404.970(b), 416.1470(b); cf. Smith v. Bowen, 849 F.2d 1222, 1225 (9th Cir. 1988) (holding that "reports containing observations made after the period for disability" that retrospectively analyze the claimant's pre-expiration condition "are relevant to assess the claimant's disability").

The new evidence Plaintiff submitted dates from August 2009 to January 2011. (See AR 241-75.)8 Thus, some of it related to the period before the ALJ rendered his decision, in November 2009, and some arose later. Although it appears that some of the symptoms Plaintiff claimed, such as being unsteady on her feet and dizzy, arose from her as-yet-undiagnosed MS, the Court need not decide whether the new evidence would have altered the ALJ's opinion because the ALJ will necessarily have a chance to evaluate that evidence on remand. See Johnson v. Astrue, No. C09-5688RBL, 2010 WL 3998098, at *5 (W.D. Wash. Sept. 14, 2010) ("Remand for reconsideration of the ALJ's residual functional capacity finding . . . will necessarily require the administration to reconsider all of the medical evidence, plaintiff's testimony, the lay witness statements, and the additional evidence submitted to the Administration's Appeals Council in their entirety."). The Court does note, however, that the ALJ provided very little explanation for his determination that Plaintiff's vertigo, nausea, dizziness, and balance problems were not severe. (See AR 30-31.) On remand, to the extent the ALJ finds that those conditions, or Plaintiff's MS, are not severe impairments, he should set forth specific reasons supporting his findings. See Webb v. Barnhart, 433 F.3d 683, 687 (9th Cir. 2005) ("[A]n ALJ may find that a claimant lacks a medically severe impairment or combination of impairments only when his conclusion is `clearly established by medical evidence.'" (quoting SSR 85-28, 1995 WL 56856, at *3)); Lockwood v. Colvin, No. 12-cv-00493-NJV, 2013 WL 1964923, at *7 (N.D. Cal. May 10, 2013) (reversing when ALJ failed to "explain why" he found additional impairments nonsevere).

VI. CONCLUSION

When error exists in an administrative determination, "the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation." INS v. Ventura, 537 U.S. 12, 16, 123 S.Ct. 353, 355, 154 L. Ed. 2d 272 (2002) (citations and quotation marks omitted); Moisa v. Barnhart, 367 F.3d 882, 886 (9th Cir. 2004). Accordingly, remand, not an award of benefits, is the proper course in this case. See Strauss v. Comm'r of Soc. Sec. Admin., 635 F.3d 1135, 1136 (9th Cir. 2011) (remand for automatic payment of benefits inappropriate unless evidence unequivocally establishes disability). As noted above, on remand, the ALJ should inquire as to Plaintiff's reasons for failing to seek treatment for her impairments, and he should reevaluate her credibility accordingly. Moreover, to the extent he concludes that Plaintiff's vertigo, nausea, dizziness, balance problems, and MS are not severe, he should set forth specific findings supporting those conclusions.

ORDER

Accordingly, IT IS HEREBY ORDERED that (1) the decision of the Commissioner is REVERSED; (2) Plaintiff's request for remand is GRANTED; and (3) this action is REMANDED for further proceedings consistent with this Memorandum Opinion.

IT IS FURTHER ORDERED that the Clerk of the Court serve copies of this Order and the Judgment herein on all parties or their counsel.