Individual Unemployability (IU) allows a veteran to receive compensation at a 100% disability rate even though their service connected disabilities are not actually rated at 100%. IU is not a separate claim for benefits. Instead, think of IU as a part of a claim or as an inferred claim for increase . The road to receiving compensation for IU involves two steps. First, to be eligible for IU, a veteran must meet certain rating requirements. The second step is to show that the veteran is not able to maintain substantially gainful employment.
A veteran must meet one of two rating requirements. A veteran must have one of the following: (1) A service connected disability with at least a 60% rating; or (2) a 70% combined rating based on multiple service connected disability, with at least one of those disabilities having at least a 40% rating.
However, just because a veteran meets one of the above requirements does not mean the veteran is entitled to IU. The next step is to prove that the veteran is unable to maintain “substantially gainful employment as a result of their service connected disability or disabilities.” Note that, just because a veteran has a service connected disability with a qualifying rating does not mean the veteran should receive IU. The qualifying disabilities must be the reason that the veteran can’t work.
This does not necessarily mean that if a veteran is working they can’t receive IU. Substantially gainful employment defined as a full time job that pays a wage greater than the poverty level. A job that pays less than the poverty threshold for a one person household is known as marginal employment. So, if a veteran is working and makes less than $11,770 a year, ($11,770 is the 2015 U.S. poverty guideline for a household of one person) then the veteran does have substantially gainful employment.
Additionally, what’s known as “sheltered employment” does not count as substantially gainful employment. Sheltered employment is a job in a protected or “sheltered” environment. For example, if a veteran is working, but does not have to meet the same requirements as someone else in that job position would be expected to meet, the veteran is said to be working in a sheltered environment. Another thing to know about sheltered employment is that a veteran working in a sheltered environment can earn more than the poverty threshold and still be eligible for IU.
If a veteran meets the requirements for IU, what’s next? To receive compensation for IU, a veteran should file the VA Form 21-8940 Veteran’s Application for Increased Compensation Based on Unemployability. This form should be filed with the RO closest to the veteran’s residence. One section of this form that may give veterans trouble is section 17. Section 17 asks a veteran to “list all of your employment including self-employment for the last five years.” While this sounds like the VA is asking the veteran to list employment for the past five years of their life, the VA is actually asking the veteran to list employment for the past five years the veteran worked. For example, it’s 2015, but the veteran hasn’t worked since 2005. That veteran should list employment information from 2001 to 2005.
It is difficult to get the VA to grant IU. The best evidence a veteran can submit to prove that they should be receiving compensation for IU is an opinion from a doctor or a vocational expert saying that the veteran is unable to maintain substantially gainful employment because of their service connected disabilities. Sometimes the VA will request a C&P examination on the issue of IU. When will the VA do this? The VA will provide an examination if it is unclear how much of an effect service connected disabilities versus non service connected disabilities have on the veteran’s ability to work. If the veteran is scheduled for a C&P examination he should ask the VA examiner to give an opinion on the effect the veteran’s service connected disabilities have on his ability to get and keep substantially gainful employment. If the medical evidence shows that the effects of the veteran’s service connected disabilities can’t be separated from the effects of the veteran’s non-service connected disabilities, then the VA is supposed to give the veteran the benefit of the doubt and find that the service connected disabilities are the reason for unemployability.
Remember, ONLY service connected disabilities can be considered for IU. Even if a veteran has a severe condition that prevents him from working, this condition cannot be considered for his IU claim if it is not service connected. However, the VA CANNOT deny entitlement to IU based on the combined effect of service connected disabilities with non-service connected disabilities.