OPINION AND ORDER
ROBERT E. JONES, Senior District Judge.
Plaintiff Rebecca Jones appeals the Commissioner's decision denying her application for disability insurance benefits under Title II of the Social Security Act. The court has jurisdiction under 42 U.S.C. § 405(g). I REVERSE the Commissioner's decision and REMAND for calculation and award of benefits.
Jones alleged disability beginning August 22, 2008, due to bipolar disorder, schizoaffective disorder, anxiety, paranoia, and auditory hallucinations. Admin. R. 59, 146, 164. The alleged onset date coincides with the date she was separated from her employment with Jackson County Health Department based on a medical discharge. Admin. R. 595-96.
The ALJ applied the sequential disability determination process described in 20 C.P.R. § 404.1520. See Bowen v. Yuckert, 482 U.S. 137, 140 (1987). The ALJ found that Jones's ability to perform basic work activities was significantly limited by schizoaffective disorder. Admin. R. 20. The ALJ found that, despite her impairments, Jones retained the residual functional capacity ("RFC") to perform work involving simple, routine, repetitive tasks with a reasoning level of no greater than 1, no more than occasional contact with coworkers, and no contact with the general public. The ALJ found that Jones had no physical impairments limiting her ability to perform work at all levels of exertion. Admin. R. 22.
The ALJ found that Jones's past relevant work required activities that were precluded by her RFC. The vocational expert ("VE") testified that a person with Jones's age, education, work experience, and RFC could perform light, unskilled occupations such as table worker, hand stuffer, and basket filler, which represent hundreds of thousands of jobs in the national economy. Admin. R. 26, 101-02. Based on the VE's testimony, the ALJ concluded that Jones was not disabled within the meaning of the Social Security Act. Admin. R. 26.
STANDARD OF REVIEW
The district court must affirm the Commissioner's decision if it is based on proper legal standards and the findings of fact are supported by substantial evidence in the record as a whole. 42 U.S.C. § 405(g); Batson v. Comm'r of Soc. Sec. Admin., 359 F.3d 1190, 1193 (9th Cir. 2004). Under this standard, the Commissioner's factual findings must be upheld if supported by inferences reasonably drawn from the record even if evidence exists to support another rational interpretation. Batson, 359 F.3d at 1193; Andrews v. Shalala, 53 F.3d 1035, 1039-40 (9th Cir. 1995).
I. Claims of Error
Jones contends the ALJ failed to accurately assess her RFC because he improperly discredited her subjective statements about the limiting effects of her symptoms and rejected the statements of lay witnesses who observed the effects of her impairments. Jones contends the ALJ failed to recognize that in her past work, she required special accommodation that is not available in competitive employment. As a result, Jones contends, the ALJ elicited testimony from the VE with a hypothetical question that did not accurately reflect all of her functional limitations.
II. Credibility Determination
Jones alleged disability due to bipolar disorder, schizoaffective disorder, anxiety, paranoia, and auditory hallucinations. Admin. R. 59, 146, 164. She reported a history of manic, depressive, and psychotic episodes, suicide attempts, and psychiatric hospitalizations dating back to the late 1970s. Admin. R. 514-17. She said she experiences ongoing daily auditory hallucinations. Admin. R. 61-62.
Jones alleged that her symptoms caused her to become distracted and confused and unable to maintain concentration. She was unable to multitask, work at an adequate pace, handle job stress, accept criticism from coworkers, or interact with members of the public. Admin. R. 59-60, 164. She was fearful and anxious with unfamiliar people, environments, and situations. Admin. R. 63. Jones said she could tolerate working part time at a simple job, but she needed a ...