VA Unemployability (IU) Guide

The Back Door to 100% VA Disability

100% disability. Speak to any veteran trying to get a 100% VA rating and you will understand that is not simple. However, there is a “backdoor” that is often overlooked by veterans seeking compensation for disabilities keeping them from working: Total Disability Rating Based on Individual Unemployability (TDIU or IU).

Currently, there are two ways for a veteran to receive 100% schedular rating disability compensation from the Department of Veterans Affairs.

Service Connected Disability Benefits

You have a service-connected disability, or multiple disabilities, which VA identifies as 100% disabled. This way to a 100% va disability rating is difficult if you are trying to combine multiple disabilities in order to reach 100%.

Not Able to Work

You have a service-connected disability that keeps you from works, regardless of schedular rating. This backdoor to a 100% rating is when the service connected disabilities prevent you from getting and keeping a job. In other words, the alternative IU route can make it easier to gain the same benefits as a regular 100% rating. If your disabilities keep you from holding a job then you should be eligible for IU!

Common Mistakes When You File Unemployability

VA admits some veterans are still unable to work due to their disabilities by granting IU, despite their assigned combined ratings not reaching 100% disability.

How do you know what the VA is looking for when it decides these unemployability claims: In this short guide, we will discuss the following questions about IU.

How do you get started with your IU claim?  Watch this brief video on unemployability claims.

Not able to work because of your VA disability? We win 96% of the cases we have decided to pursue.

qualifying for TDIU benefits

How do I know if I’m eligible for IU?

Am I eligible for IU?  If a veteran cannot work— engage in its  terms “substantially gainful employment”—due to service connected conditions, she is unemployable. “Substantially Gainful employment” is  holding a job that pays at least an amount equal to the poverty level.

VA focuses on whether your service connected disabilities prevent you from getting and keeping a job. In other words, are you able to find a job that pays enough to put your earnings over the poverty level? And can you keep that job if you are able to find one? If your service connected disabilities prevent you from finding and keeping a job, you may be entitled to IU.

How do I prove IU?

When VA evaluates disability claim for IU, it first looks at whether the veteran meets the schedular requirements for IU. They are as follows:

  • Veterans with only one service connected condition must be rated greater than or equal to 60% for that condition;
  • Veterans with two or more service connected conditions must have at least one condition rated at or above 40%.  The combined ratings of the disabilities must be at least equal to 70%;
  • For the purposes of the IU, VA considers the following combinations as a “single disability”;
    • One involving one or both arms, or legs, including the bilateral factor;
    • disabilities resulting from a common problem or single accident;
    • Disabilities affecting a single body system (i.e., orthopedic, respiratory);
    • Multiple injuries incurred in action; and/or
    • Multiple disabilities incurred as a POW.


A veteran suffers from several service connected disabilities such as diabetes and diabetic retinopathy and neuropathy. These disabilities arise from a common cause (the diabetes). Therefore, these ratings need only combine to a 60% evaluation in order for the veteran to qualify for IU.

A veteran has ratings of 40% for a Lumbar Spine condition, 30% for a knee, and 30% for his PTSD.  VA's combined rating math, results in a 70% rating. Since the veteran's spine is rated at 40% and he has a 70% total rating, he meets  IU.

Important things to remember about the schedular requirements for IU

When making a determination on IU, the VA can only consider disabilities that have already been service connected, in other words, a condition as a result of service. If a veteran is service connected for his knees and his back, but in reality could not work due to his PTSD-related anger outbursts (which have not been service connected but are part of a pending claim), VA will only consider the knees and the back when deciding if the veteran can work or not. Until service connection is granted for PTSD (if at all), the veteran must prove that he cannot work due to his knees and back condition alone.

The VA cannot consider non-service connected disabilities when making a determination on IU. For example, if a veteran has a 70% service connected rating for PTSD and a non-service connected back disability, the VA must review the veteran’s ability to work solely as it pertains to the service connected PTSD. Even if the veteran is receiving worker’s compensation or Social Security Disability for the back injury it doesn’t matter. VA cannot use this information against the veteran. After all, the veteran may not be able to work for more than one reason. Here, if the veteran cannot work due to his service connected PTSD, he should get IU.

The age of the veteran is not a factor when qualifying for IU. This means the VA cannot state that because the veteran is a certain age he would not be able to work due to age alone.

Not able to work because of your VA disability? Our firm has helped 1000’s prove their 100% IU Claim.

What if I don't have a 70% rating?

What happens if you don’t meet the rating requirements for IU?  Can you still get IU?  Yes, you can.

If you do not meet the 60%/single disability or 70% combined disabilities  VA still allows for IU.  VA recognizes some veterans can’t work because of their service connected disabilities, but they don’t meet the schedular requirements. In such cases, the regional office (RO) submits the claim to the Director of the Compensation and Pension Service.  The Director reviews the claim for extraschedular consideration. The RO  must prepare a statement regarding the veteran’s disabilities, work and educational all other factors bearing on the issue. As you can imagine, this is not a quick process.  Receiving  IU through extraschedular consideration can take a long time. Also, it is very rare for the RO to refer a claim for IU for extraschedular consideration.  If you believe your claim warrants such consideration, you should make the request for extraschedular IU.  Typically, you have to fight all the way to the BVA before you even get the referral to the Director.

Show An Exceptional or Unusual Circumstances

The standard for awarding IU on an extraschedular basis is that the case must present an exceptional or unusual disability picture.  This would include factors such as marked interference with employment or frequent periods of hospitalization.  Factors such as these that would make it impractical to apply the regular schedular standards. These extraschedular cases are granted on an individual basis.  Therefore, it is a good idea to present evidence that shows why the veteran’s particular circumstances render him or her unable to work.  This evidence could include work background, education background, and periods of hospitalization. Again, note that these are very difficult cases to win, but not impossible. The best thing you can do is gather as much evidence as possible.  We recommend an an independent medical opinion, which shows  your unique circumstances render you unable to work.

How do I apply for IU?

Interestingly enough, you may have already applied for IU without knowing it. A claim for IU is not always a separate, free-standing claim. You ‘officially’ can file an IU claim on a VA Form 21-8940, Application for Increased Compensation Based on Unemployability.  However, the evidence in an underlying claim can raise IU too.  Two places where this could happen are during a service connection claim or a claim for increased rating.  If during one of these claims there is evidence of IU then there is a claim for IU.  VA should consider the issue as part of the underlying claim, even if the veteran has not specifically requested IU.

Rarely, does the VA decide IU without the veteran raising the claim first.  Further the RO will not grant IU without the veteran submitting VA Form 8940.  So if you think you are eligible for IU,  submit the 8940.

VA Form 8940 is a rather complex and confusing form.

Section 1

Section I of the form deals with Disability and Medical Treatment. In this section, the veteran must state what disability keeps her from working. Remember, the veteran’s service connected disabilities alone must keep the veteran from work. If there are any non-service connected disabilities involved VA is not supposed to consider these.  That said, the veteran should be proactive.  She should get a doctor’s statement showing the service connected disabilities alone keep her from working. There is also a place on the form for medical treatment.  The veteran should provide the name and address of where she is treating for the service connected disabilities. It is very important to state the frequency (monthly, weekly, every other week, etc.)  of treatment.  This is a better practice than giving specific dates of treatment relating to his or her particular disabilities.

Section 2

Section II of the form asks for all employment history.  This goes back for a five-year period preceding the date on which the veteran claims to have become too disabled to work. So, for example, if a veteran stopped working in 2010, work history from 2005-2010 would need to be provided.  Additionally, the veteran must provide the names and addresses of the employers.  Finally, he must state what type of work was performed, how many hours per week, and the dates of employment.

Section 3

Section III addresses schooling and other training. In this section, the veteran must state whether she acquired any other training before becoming too disabled to work.  Then she must put down if she had any training since becoming too disabled to work.  If she had any training, she must specify what kind of training it was. In this the veteran giving accurate and specific information goes a long way to help VA make a timely decision.

It is important to understand that IU is not a freestanding claim, but is part of the rating process. For example, the VA grants a veteran a 70% rating for PTSD, but does not decide the issue of IU. The veteran may think, “Okay, now I have a 70% rating so I can apply for IU.”  In truth,  what he should do is appeal the decision granting the 70% rating for failure to consider IU. This is important because of the way the VA determines the effective date for IU.

The effective date for IU is often something that the VA gets wrong. The effective date for IU should be the date when VA first received evidence indicating the veteran was unemployable. This could be a doctor’s letter or a note in a medical record.  Either of these would need to state that the veteran’s disability interfere with her work. Second, you must determine the status of the veteran’s claims, if any, at the time the VA received this evidence.

There are three main ways to answer the second question:

  • VA first received evidence of the veteran’s unemployability when she filed a claim for service connection.  Similarly when VA was considering whether to grant service connection. If VA eventually grants service connection for the veteran’s disability and awards IU, the effective date would be either:
    • the date VA received the claim for service connection, or
    • the date the veteran first became unemployable due to his or her service connected disabilities, whichever is later.
  • If VA first received evidence of the veteran’s unemployability after VA granted service connection, but before the VA made a final decision on the rating for the disability, the effective date for an award of IU would be:
    • the date the VA received the claim for service connection, or
    • the date the veteran first became unemployable due to his or her service connected disabilities, whichever is later.
  • Finally, if the VA first received evidence of the veteran’s unemployability when she filed a claim for an increased disability rating or while a claim for an increased disability rating is pending, the effective date for an award of IU would be:
    • the date VA received the claim for an increase in disability rating, or
    • the date the veteran first became unemployable due to his or her service connected disability ratings, whichever is later.

If I'm working can I get IU?

No. In fact, VA unemployability does not always mean that a veteran is not working. The key, however, is where the income comes from. On one hand, all income earned from employment must be at or below the poverty level.  On the other hand, the income can be from a job that is considered to be “sheltered”.

Regarding income that is below the poverty level, marginal income, it is not substantially gainful occupation. Marginal employment is considered as “earned annual income that does not exceed the poverty threshold for one person.  VA uses income statistics from the US Department of Commerce, Bureau of the Census.” For 2016, the poverty level for which a veteran must be working under was $11,880.

What evidence do I need to support my claim for IU?

To get IU benefits, the evidence must show you cannot work due to a service connected disability.  Evidence supporting your claim could be letters from former co-workers or employers.  A professional’s opinion would  be more impactful evidence.  If the veteran has participated in a VA vocational rehabilitation program VA must also consider this evidence.

VA must consider your educational and work history when determining if you are entitled to IU. VA must look at your education and training, and how your current disabilities.  Then VA must see how those disabilities could prevent you from working in the jobs you had been trained for.

VA has to review your earnings in order to assess if your income is above or below the poverty threshold. A veteran can produce proof of earnings through pay stubs, tax returns,  or a Social Security Earnings Record. If the earnings are above the poverty threshold, VA must consider if your worked is in a “sheltered” environment. You will need supporting evidence to prove that the workplace is sheltered.  For example, an employer letter verifying the excessive accommodations.

When it comes to proving to the VA that a veteran is eligible for IU, the best evidence is a professional opinion from a vocational expert or competent medical doctor concerning the veteran’s ability to secure or follow a substantially gainful occupation. The opinion should say it is “more likely than not” that you are unable to work due to your service connected disabilities. Again, the key here is “service connected.”

VA often will schedule a veteran for a Compensation & Pension (C&P) exam to get an opinion on IU. The exam report must include a rationale as to whether it is as likely as not that the service connected disabilities render the veteran unable to work. Additionally, the report must describe the functional impairment caused by your disabilities and how that impairment impacts all employment.

If you have multiple service connected disabilities contributing to IU, VA will likely send you to separate exams for each. Every exam will discuss your single disability and the functional impairment that you have due to that disability. For example, a back examiner may say, “The veteran can’t stand or can’t walk, but he could do sedentary work.” A neurologist may say, “He has to lie down at least once a week for several hours due to your migraines. As long as an employer will give that benefit, then he could work.” A PTSD examiner may say, “He doesn’t get along with people, so as long as he’s by himself, he’s fine.”

The problem is that the VA will usually look at these three opinions separately.  When it should look at them together in order to create a complete picture of the veteran’s disabilities. If that is the case, the best thing to do is get an independent medical opinion.  This exam should look at the disabilities together or shows one service-connected disability renders the veteran unable to work.

Not able to work because of your VA disability? We win 96% of the cases we have decided to pursue.

Is my IU rating permanent?

IU is not always rated a permanent condition.  VA may send you to periodic medical exams to evaluate whether IU is still warranted.  VA cannot just take IU away from you.  There are safeguards in place in place to prevent that.

VA must follow its own regulations when trying to take away a your IU. If VA fails to do so the reduction is considered void and unlawful. If the VA determines you no longer are unemployable, it must first issue a notice of proposed reduction. This first notice gives you sixty days to submit evidence to show that your condition has not improved. You also have an option to request a pre-determination hearing within thirty days of the notice. Requesting a hearing may buy you additional time to submit evidence.

Furthermore, there are several protections set forth in the regulations against a proposed reduction. One of those protections is for 100% ratings when based on unemployability (IU or IU). VA has the burden to show t actual employability has been established by clear and convincing evidence.  If VA cannot do so then it cannot reduce or sever IU. This is a very high burden to meet. Even if you are working, you are allowed to keep your IU for a full year. However, where you have not returned to work then VA must have strong evidence to discontinue IU.

Even if VA determines you have sustained improvement that would warrant reduction of IU the analysis does not end there. The record must reflect the veteran is able to engage in substantial gainful employment.  If it doesn’t then IU must be preserved. In other words, in cases where your disability has improved, your IU rating can still be protected from reduction. If the evidence continues to show that you can’t work due to your service connected disability.

If you submit evidence within the first sixty day notice timeframe, VA may send you for a re-examination. If it decides to do so, VA will not decide whether to reduce until outcome of the new examination. The examination  for reduction must be as thorough as the examination that established the current rating. Attending the examination is very important. If you do not show up, your benefits can be automatically reduced or terminated. If you are cannot attend on the date scheduled, you must reschedule, or have a good reason explaining your absence.

VA must review all of the new evidence, including the re-examination, in the context of the entire record. VA will then issue a final rating decision. The second rating decision starts a new sixty-day period. The reduction will go into effect on the last day of the month of the second decision.

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