When a veteran pursues a disability rating through the VA, his or her ultimate goal is usually to reach a 100% rating. In most cases, this is the highest rating at which a veteran can be paid, unless that veteran is so disabled that he or she needs a higher level of medical care. Unfortunately, the VA’s disability rating criteria make it incredibly difficult for a veteran to attain a 100% rating for a single disability. Fortunately, there is another way for a veteran to attain that 100% rating – through Total Disability based on Individual Unemployability (TDIU or IU).
TDIU Basics
TDIU looks at a veteran’s combination of disabilities in view of whether or not that veteran can work due to those disabilities. In order to qualify for TDIU, a veteran must be unemployable (unable to secure or follow substantially gainful employment) by reason of service-connected disabilities AND:
- Meet the schedular requirements of 38 CFR 4.16(a) OR
- Have an extraschedular IU evaluation, under the provisions of 38 CFR 4.16(B), approved by Compensation Service
If the VA determines that a veteran is unable to maintain substantially gainful employment for service-connected disabilities, the VA will pay that veteran at the 100% rate, even if the disability(ies) is not rated at/does not add up to 100%. This is a huge benefit to veterans. According to the schedular requirements, a veteran who is rated at 60% for a single disability, such as for a low back condition, would meet the requirements. Alternatively, a veteran who has several service-connected disabilities, with one condition rated at a minimum of 40%, and with all the conditions adding up to 70%, would also meet the requirements.
Substantially Gainful Employment
The VA defines substantially gainful employment as employment at which non-disabled individuals earn their livelihood with earnings comparable to the particular occupation in the community where the veteran resides. Substantially gainful employment is competitive (not protected) employment, with earnings exceeding the amount established by the U.S. Department of Commerce, as the poverty threshold for one person. The poverty threshold in 2014 was $12,071 for a single person under the age of 65. So, for example, if a veteran works 35 hours a week at a local grocery store at $8.05 an hour, he would be making over the poverty level, and therefore would not automatically qualify for TDIU. However, there are exceptions to every rule, which we will discuss next.
Marginal Employment
Under certain circumstances, a veteran can be working and still qualify for TDIU. The VA recognizes that there are certain instances in which a veteran works here and there to make ends meet, but cannot work enough to make over the poverty line. Likewise, there are other instances in which a veteran has a job only because he or she is being allowed special accommodations in a family or friend’s business. The VA defines these types of instances as marginal employment. A veteran’s employment can be considered marginal if:
- His/her earned annual income does not exceed the poverty threshold as dictated by the US Census Bureau for one person; OR
- His/her earned annual income does exceed the poverty threshold BUT the veteran is working in a protected environment, such as a family business or a sheltered workshop. The VA reviews at these situations on a case-by-case basis.
The VA’s internal manual specifically points out that marginal employment is by definition not substantially gainful employment. Unfortunately, VA raters mess this up all the time. Particularly in protected employment cases, the VA will take one look at the veteran’s earnings and deny the claim for TDUI based on wages alone. This is not the correct VA procedure. In marginal employment cases, it is a good idea to obtain statements from one’s employer outlining what kinds of accommodations are being provided the veteran which permit him/her to continue working.
Self-Employment
An area which the VA looks at very closely is the issue of self-employment. As a general rule, it is inherently difficult to pursue a claim for TDIU when one is self-employed. This is mostly because the veteran can control the amount of wages paid to him/herself. Therefore, the VA raters are not allowed to make a finding of marginal employment solely based on low wages. However, the VA’s manual specifically instructs the raters to “keep in mind that the issue for consideration is whether the frequency and type of service performed by the veteran equates to substantially gainful employment.” For example, consider a veteran who owns a plumbing company and now makes low wages because he was obliged to cut back on the number of jobs he works due to a service-connected back competition. The VA is supposed to consider the low wages in conjunction with the time he has lost working due to his back condition when they are reviewing the claim for TDIU.
No matter what employment situation a veteran may find himself, there is one simple constant that is imperative when filing a claim for TDIU—completing the application. The VA’s Form 21-8940 is the application for increased compensation based on individual unemployability. No matter how strong the claim, if the VA raters do not have this form on file, they are obliged to deny the claim. For tips on how to fill out this form, see our previous blog posts on this topic.
