1428, 1432 (9th Cir.1995). The Commissioner’s denial of benefits may be overturned only if “it is not supported by substantial evidence, or ... is based on legal error.” Id. We conclude that substantial evidence does not support the administrative law judge’s (“ALJ”) finding that Owens’ testimony was not credible. First, Owens’ application for unemployment benefits is not necessarily inconsistent with her claim of disability under the Social Security Act. Substantial evidence also does not support the ALJ’s finding that Owens’ medication is not indicative of Owens’ limitations. Moreover, the ALJ’s observations at the hearing and Owens’ daily activities do not necessarily support a finding that she is not disabled. See Perminter v. Heckler, 765 F.2d 870, 872 (9th Cir.1985) (per curiam) (<HOLDING>); see also Vertigan v. Halter, 260 F.3d 1044,
recognizing the established principle that the alj is not required to take the claimants assertions of pain at face value holding that evidence relied on by alj was insufficient to undermine pain allegations where medical records were replete with claimants reports of pain and of prescriptions holding that alj properly evaluated credibility where he cited specific instances where claimants complaints about pain and other subjective symptoms were inconsistent with the objective medical evidence of record holding that the alj did not err in discounting a claimants reports of pain where they were not supported by the medical record holding that alj may not base adverse credibility finding on his perceptions of claimants pain at the hearing where record shows objective evidence of claimants pain