Jim Strickland

Jim and Thom on TDIU


NOTE:  Letters in my Q&A columns are reprinted just as they come to me. Spelling and grammar are left as is and only small corrections are made to improve readability, ensure anonymity or delete expletives that may offend some readers. This is not legal advice. You should always seek the advice of an attorney who is qualified in Veterans' law before you make any decisions about your own benefits.


Jim Strickland on TDIU

    Total Disability Individual Unemployability

TDIU

Total Disability - Individual Unemployabilty (TDIU or simply IU) is widely misunderstood.

Please read the information you find below then return here to  click this link  and read a recent VA Training Letter updating the subject.

The rules the adjudicator should follow from the M21-1MR are  here .


I’m applying for 70% TDIU. Once I’ve received my award, how can I get the TDIU benefit to become a more permanent 100%?

Reply;

You’ve asked a question I receive dozens of time each month. The TDIU benefit is perhaps the least understood of all VA disability compensation benefits.

 I’ll take a moment to remind you that when you are confronting the VA disability compensation process, you’re on your own. The veteran who educates him or her self on the basics of the rules and regulations of the system is far more likely to be awarded the maximum benefit earned.

Veterans who depend on others to help them aren’t likely to fare as well. I often meet veterans who have decided that they deserve benefits but they want someone else to do the task of applying to VA and completing all the paperwork for them. They’re frequently angry when the process fails them.

I am a champion of the DIY approach. A veteran who spends the necessary time to read and understand the data I’ll present will be in control of his future. The vet who decides that this is too much work and way too much to read and understand is far less likely to achieve a maximum benefit.

I’ll do my best to keep my part of this simple and easy to understand. 

Total Disability compensation may be achieved on two separate paths at VA. You may be rated as 100% disabled via The Schedule For Rating Disabilities or you may be rated as 100% disabled via the Individual Unemployability path.

A “schedular” rating might be one where you have a condition that is required to have a 100% rating, for example, you’ve had an AICD implanted to control erratic beats of your heart. The path to this rating could be that a Vietnam veteran develops DMII. DMII in the RVN veteran is presumptively rated as service connected. If that veteran then develops heart disease, the heart disease can easily be proven as secondary to the DMII, thus the heart disease becomes a secondary service connected condition.

Should that heart disease then develop into a condition that medically requires the implanting of an AICD device, the veteran is rated as 100% disabled by the schedule. Notwithstanding the ratings for DMII and heart disease, the implanting of an AICD is rated as a 100% disabling condition.

Interestingly, the schedular rating has nothing to do with a veterans employment. The fact that there is a service connection to the implanting of the AICD device is the only requirement. That veteran who receives that rating may then become employed with no fear of losing the rating. Some people who receive such devices do choose to continue to work at gainful employment.

Then there are veterans who have a number of lesser conditions with various ratings but because of the Combined Ratings Table or “VA Math”, their multiple conditions and ratings don’t add up to 100%.

VA recognizes that many of these veterans, although they are not rated as 100% disabled, aren’t able to seek and keep gainful employment. In VA terms, they are unemployable due to their service connected disabilities.VA then looks carefully at these individuals as individuals to assess how much of an effect the combination of service connected disabilities has had on their ability to earn an income and work as productive citizens.

If it is apparent that the service connected disabilities keep the veteran out of the work force, then VA must assign the rating of 100% disabled due to Individual Unemployability. It’s worth noting at this point that to be rated as 100% unemployable by the VA system, all the disabilities considered must be service connected.

This is markedly different than the Social Security system and the SSDI benefit. In the SSA system, one must show that he or she can not reasonably hold employment due to any mix of disabling conditions. To achieve a 100% rating in the VA system, all disabling conditions that are to be considered must be established as being caused or contributed to by military service.


There are requirements when VA considers the TDIU benefit. The veteran must have a rating of at least 60% with a single condition rated at 60% or greater or the veteran must have a rating of 70% with at least one of the underlying ratings at 40%.

If those requirements aren’t met precisely the Regional Office may then forward the application for TDIU to VACO for a decision by the C & P Director. If it is then determined that this individual veteran will not be reasonably able to achieve gainful employment in the future, the Director may assign the TDIU benefit. Either the schedular or the IU benefit may be temporary or it may be permanent. If permanence is awarded for either a schedular or an IU 100% rating, the statement, “Basic eligibility under 38 U.S.C. Chapter 35 is established from [date].” is required.

It’s worth noting that many decision letters don’t include either this statement or any other hints of the permanence of the award and the veteran is left wondering. The alternative statement used is “future examinations are scheduled” meaning that the award is temporary or “no future examinations are scheduled” indication that the award is permanent.

The word “permanent” is a misnomer when used by VA. The VA may elect at any time to review any claim to render a proposal of changes to the claim. There is no protection of a 100% rating until the rating has been in place, uninterrupted, for 20 years.

Other than the path to achieve the benefit and that the IU rated veteran can not hold gainful employment,  the Schedular 100% rating and the IU 100% rating are exactly the same. The monthly benefit amount is equal across the board. If the rating is said to be permanent by VA all benefits for dependents are exactly the same.

I recommend that veterans do not attempt to change an IU rating to a schedular rating, a practice I see a lot of. To achieve the 100% schedular rating does not change any benefit that the veteran may receive. Any attempt to modify the IU status to a schedular status does open one’s folder for review however. This can be a hazardous maneuver as any time the folder is opened for review, the VA will first look at opportunities to lower the rating. I’ve communicated with a number of veterans who have attempted to have their IU switched to schedular and who find themselves staring at a letter proposing to reduce their benefit significantly because of “improvements” to their conditions.

I’ve also confronted veterans who wish to trade the IU rating to a schedular rating so that they are able to preserve their 100% rating as they return full time to gainful employment. There are a few of us who would gleefully game the system and milk out dollars by deceiving VA about the extent of their disabling conditions. I do not condone such activity personally and I’m aware of the many checks and balances that VA has in place to prevent such fraud.

The TDIU Training Letter is one of the best I’ve seen. It is comprehensive and provides a number of good examples of how this works. I’m also including another explanation of the IU benefit via a link below. While this dates from 2005, it continues to be relevant as Daniel Cooper describes the benefit to members of Congress.

You are advised to pay close attention to details in this training letter. For example, the requirement to complete VA Form 21-4140 is reinforced here.The VA Form 21-4192 , “Request for Employment Information in Connection with Claim for Disability Benefit” is required but it’s noted that, “A TDIU evaluation should not be denied solely because an employer failed to return a completed VA Form 21-4192.”Perhaps most significantly, “However, as a result of the Rice decision, a request for TDIU, whether specifically raised by the Veteran or reasonably raised by the evidence of record, is no longer to be considered as a separate claim but will be adjudicated as part of the initial disability rating or as part of a claim for increased compensation.”

Keep reading, continue educating yourself. At the VAWatchdogToday site you’ll always find the latest factual and relevant news that you can use. Learn and then DIY...Because nobody cares about your claim as much as you do.

The TDIU Training Letter is available here for viewing or download.


Facts about IU

We often refer to Individual Unemployability as IU. The Individual Unemployability Benefit is equal in every way to a 100% Schedular rating. The compensation is 100% and that dollar amount is equal to both ratings. If the veteran is rated as 100% Schedular, he or she may work at any job they are capable of doing. The veteran who is rated as IU may not hold "gainful employment".

The IU veteran is required to complete a yearly VA Form 21-4140 to verify that there has been no employment in the previous year. Each Regional Office seems to have its own way of delivering these forms, all too often they don't deliver them at all. It is the veterans responsibility to ensure that the 4140 is completed and mailed in on or about the anniversary of the award each year.

The veteran should simply download the form by clicking here , printing it and mailing it in using certified mail, return receipt requested.

Either the 100% Schedular rating or the 100% IU rating may be rated as Permanent and Total (P&T). Either rating may be a temporary one with future examinations scheduled.

If I appeal the rating decision and I am denied a rating increase back to 100% will I lose the 70% UI rating that they are proposing?

I recently had a reexamination not 2 years after I was granted 100% which was a reexam after my initial C&P which rated me 70% IU. My rating is being proposed to be reduced to 70% IU which isnt a problem. My concern is my reexam was only 20 minutes and nothing actually changed except I started seeing a VA psychiatrist again about 7 months prior to my exam. My question is if I don’t agree with my rating at all. I’m housebound and can’t drive and other major issues. If I appeal the rating decision and I am denied a rating increase back to 100% will I lose the 70% UI rating that they are proposing. I know it sounds greedy but with the 100% rating I also got SMC-S and now I will loose that extra money if I am at the 70% IU. Any advice would be helpful.

Reply:
  I believe you have had a temporary rating of 100% TDIU. The underlying rating was at 70%. In the award letter you originally received it should have said, "Future exams are scheduled" or similar wording.

  You've come to the time when VA has reexamined you and they believe that they see an improvement in your condition. They have proposed to reduce you from the 100% TDIU and rate you at the 70% you had before.

  That's a significant loss. You should appeal if you believe that VA has made a mistake and that you should be rated at the 100% TDIU as before.

  To appeal isn't difficult. You can probably do a DRO appeal for yourself.

If you believe that you need a hand with the appeal, you can speak with a veterans law attorney at no cost.

  Don't wait too long to begin the appeal. Timeliness in filing is important.


Could you tell me if this is normal, or sounds like the truth to you? Is there a chance that they will just rate him to 100%?

  My husband has been rated for a number of disabilities with the VA for years now, including TBI at 70%.  We have gone through a 2.5 year application for service connection for PTSD and depression, which was granted, but was all combined as “Amnesic Disorder due to Traumatic Brain Injury with Post Traumatic Stress Disorder and Depressive Disorder”  rated at 70 %.  His total combined rating, using the VA Math is 93.8%. Upon receiving the “new” rating, we decided to file for TDIU, as my husband has already been granted SSDI due to his inability to maintain gainful employment due to TBI and Degenerative Disc Disease (of which 2 of his 8 bad discs are connected).  After applying for TDIU,  his claim was listed as “Individual Unemployability (new) and Traumatic Brain Injury (Increase)” on Ebenefits.  I called, and asked why the TBI was up for increase,  and the VA employee told me that the Reviewer would have listed my husbands most severe disability, which could most likely be increased to 100% Scheduler for increase (It was also what we had claimed for the TDIU reasoning).  He said that it would be “easier” for the VA to Rate him to 100% Scheduler than grant TDIU in the long run, as by rating him to 100% he would not need to be reviewed for employability in the future, so the VA would prefer to do it that way.

  We thought this seemed odd.  Though a Scheduler rating would be preferred, and for 2.5 years we thought that the PTSD and depression would provide the means to that end.  Could you tell me if this is normal, or sounds like the truth to you?  Is there a chance that they will just rate him to 100%?

Reply,
  If you dialed the toll free number or used eBenefits, I have to advise you that you shouldn't do that. Those people aren't very well trained. If you called again and asked the same question, you'll get a different answer. They do not have full access to the veterans claim folder and they are not "raters".

  For the most part, ignore all that and trust your instincts. Either 100% rating is fine. They are equal in every way except that a 100% schedular rating allows the veteran to work. That's the only difference.  If he is rated at 70% and he receives SSDI for the conditions of the 70% rating, the upgrade to 100% TDIU is almost guaranteed. VA doesn't have to offer TDIU for a vet with SSDI but it happens almost every time.

  If VA offers a 100% schedular rating, fine. Accepting either one of those is the thing to do.

  Either the schedular or the TDIU benefit may be permanent or temporary. That really confuses a lot of people. I don't think it'll confuse you, you seem to have a good grasp of all this. You tell me that he has an upcoming C&P exam...The C&P exam is nothing to be intimidated by.


Rated as TDUI but I've accepted employment.
Dear Jim,
  I'm afraid I may have made a mistake. I am rated as TDIU and I accepted employment. The employment is temporary and only lasts 2 months.  Now a friend of a friend tells me that I'll probably lose the IU benefit since I worked.  I don't know what to do. If I lose the full benefit, I'll probably lose everything. Can you help me?

Reply:
Delivering good news is the best I can do to help you. The fact is, you don't need anyone to help you as you've done nothing wrong.

  The TDIU (Total Disability, Individual Unemployability) provides a 100% rating for veterans who can't work at a traditional job because of their service connected disabling conditions. The TDIU veteran receives the same benefits as the 100% schedular rated veteran.

  In the VA lexicon, a full time or traditional job is called gainful employment. Anything less than that is called marginal employment.
  Each of those terms is loosely defined as earning an income above or below the poverty line. There are specifics that must be considered if the veteran is self employed or employed in a family owned business but in broad terms, you're either able to work full time or you aren't.

  The term unemployability isn't the same as unemployed. To be eligible for the VA TDIU benefit, your inability to hold gainful employment must be because of service connected and rated disabling conditions.

  Any income you make will have to be reported to VA on the annual VA Form 21-4140. I recommend that you never forget to inform VA of the income. VA will cross check your tax records with the IRS and if you don't report income to the VA, it may appear that you're not being truthful...never a good thing.

  Enjoy the few extra dollars you made at your temporary employment and don't worry about it.

  While the TDIU benefit can be a life saver, it doesn't replace the money earned through gainful employment, nor the satisfaction most people feel from a good day of work.

  Every veteran I know who receives the unemployability benefit would rather be working at a good full time job.


"Yes, you can and probably should apply for TDIU"
I have a couple of questions:
1.  Can the VA say you have to get surgery because you could be better and get less of a benefit? I have a 3 level cervical fusion presently and my surgeon outside the VA has recommended adding a fusion because I have gotten worse.  I am going to apply for an increase. 

2. Same with my lumbar strain rating. I get 20% (under rated) and I recently had a C&P exam in which the ROM indicates I should have a 40% for lumbar, so I am going to ask for an increase. Can they say the same thing and make me get surgery because it could make me better and reduce my benefits?

  My doctor has stated long ago that I am only going to get worse and I also have 70% depression and 30% migraines. I can not work and haven’t been able to for about 7 months now. Can I apply for TDIU P&T or see if I get scheduled at 100%?

Reply: 
No. VA can't force any sort of treatment on you. Your condition is rated just as it is.

  For example, some veterans who have a service connected prostate cancer choose to not have it treated. That's very common these days...watchful waiting. The veteran who chooses watchful waiting will remain at 100% until he dies. The veteran who elects treatment will have a reduced rating.   Yes, you can and probably should apply for TDIU

Thom Stoddert, Former VA Rating Specialist Gives his Insights on TDIU
Individual Unemployability Basics


My long time, and close Army buddy came to me for assistance with his  VA claim for Individual Unemployability (called “I/U” for short). He had spent years dealing with  attacks of Menieres disease.

  It was severe enough that the VA granted him 60% for this disease shortly after leaving the Army. He continued to work for several years  until the stress of his job and severity of attacks became impossible to work around. He then quit his civilian position with the Army and applied to the VA for I/U. That is when  the problems began.

  Individual Unemployability, when awarded,  pays the veteran at the 100% rate regardless of the actual rating percentage. In other words if a veteran is rated at 60% or 70% for medical conditions that the VA has granted the status of service connection; the vet can be paid at the higher 100% level if the medical evidence shows that he or she is made incapable of work by the service connected issues.

  The basic rule for eligibility of this benefit is that the veteran must be rated, awarded service connection, for a single medical issue at 60%; or be rated at 70% for several issues and one of them must be at least 40%. This is called the 60/40 rule. This is the first half of the eligibility requirements. The next  is a little more complicated.

  The veteran must show that he can not work because of his or her service connected medical issues. Though a veteran may have a rating percentage greater than the 60/40 rule; there must be evidence showing that the service related medical issue(s) really does keep the veteran from working and will most likely prevent a return to gainful employment. 

  Here is where a lot of vets get turned around.  There are several pitfalls. First; you must be unable to work specifically because of a Service Connected medical issue(s) and will most likely not be able to return to reasonable employment. As an example; I know of veterans who have been diagnosed with medical condition “B” and no way can  they work and they also are rated at 70% for medical condition “A”. They worked many years at the 70% level and now they can not work. It is the non-service connected issue that makes them unable to work, not the service connected medical issue. Most likely in cases like this a vet will not be granted I/U nor be paid at the 100%. 

  Veterans get into trouble here all because of the needed evidence. First, the veteran must not be working. In other words a veteran can not be working, then be awarded I/U and quit at a later date. One of the reasons for this is that a vet  awarded this benefit might continue to work. So the VA has the rule; you can not be employed when you apply for this benefit. In reality it amounts to the fact that you can not be working when they verify your employment status.

  Second; the medical evidence must show the veteran is
not able to work because of the service connected issue or
issues. Often veterans who have retired from the work force
can apply for this benefit if the medical records show that their service connected conditions would keep them from working if they wanted to. Age is not considered when determining whether the VA grants this award. Therefore a vet who is 67 years old, whose service connected arthritis is so severe he could not work if he wanted to  would qualify.

On the other hand if a veteran’s medical records show that it is heart disease,  not arthritis that keeps him from working, regardless of age, it is a No-Go. Another scenario that back fires in a veteran’s face is when he or she is not working, meets the 60/40 rule, yet employment is still possible. An example that I saw often was that of a very well educated veteran with a service connected issue that would keep him or her unemployable if they were in construction, but not as an accountant with a desk job.

The scenario goes like this: a vet has the education and skills that would provide many work opportunities such as in the medical field.  The veteran gets an increase in the rating percentage that meets the 60/40 rule. So they quit their job and apply for I/U and get refused. The reasoning behind the VA decision is that the medical evidence does show the veteran not being able to work in a physically and emotionally demanding Trauma Room, but there are many opportunities for the vet to take a desk job which is well within the vets ability. Each claim is supposed to be looked at on a case by case basis.

The VA in determining whether to grant Individual Unemployability must also consider the veteran’s age. A veteran, despite all the laws, does have a harder time finding new employment that is within their level of impairment as they get older.  A young vet will generally have less difficulty than a 60 year old, especially with further education.

Education is a factor for the VA when considering the issue for I/U. Veterans with higher levels of education generally have more opportunities to provide themselves with a good income despite their impairment(s). This is a simple fact of life in this country.

The VA is also required to  take into consideration the local economy and recognize its impact on veterans. A downturn in the economy does present fewer opportunities for a veteran with medical impairments.
  A veteran can still apply for special consideration. This is possible when the medical evidence clearly shows that a service connected medical issue(s) does keep the vet from being employed, even when the 60/40 rule is not met.

  Getting back to my friend; what happened to him that made his claim for I/U so hard? The VA wanted verification that the real reason he resigned from his  position was a medical problem that was related to his military time. So they sent a form to his former employer, Madigan Army Medical Center, Fort Lewis. The VA’s request for verification of why he left his job was ignored by them, twice.

  But the battle for evidence was not over. My buddy got several letters from his former colleagues who provided statements attesting to the reason why he left work. The VA in Seattle is fully aware how corrupt the system is at Madigan. So with the statements and his medical records my friend is sure to get a favorable decision from the VA.


Special Cases of Unemployability
By Thom Stoddert


  For those special veterans like Butch C. from Missouri, a few words about a federal regulation of the VA called 38 CFR 4.16, or the extra scheduler benefit.  

  Butch is a Viet Nam veteran who represents many veterans that get stuck between reality and hard regulations. However, Butch is both smart and articulate.  First, he found some skilled service officers who have worked with him. Second he did his homework well; he learned the regs.

  Though he is service connected for Diabetes at 20%, this doesn’t show his true impairment linked to his military service. He has been a truck driver most of his life with an impeccable record. However, federal regulations unrelated to the VA deny him his all important Commercial Drivers License, because he takes insulin to control his disease. In other words once he has been prescribed insulin injections he could no longer drive a truck/commercial vehicle and earn a living. 

  So, now in his early 60s  he is unemployable at his usual career. He is not likely to find gainful employment in a related career field and the present economy is only making things worse for him and probably a lot of other veterans. 

  Therefore, with the 1) loss of earning potential, 2) his longevity at the present career, 3)overall education, and 4) the present economic climate, all make the likelihood of gainful re-employment with his service connected medical issue(s) unlikely. Thus the need for an extra-scheduler rating for unemployability, because Butch does not meet the normal criteria for individual unemployability ( I/U ) and he did learn about 38 CFR 4.16 which reads:
“ 38 CFR 4.16(b) It is the established policy of the Department of Veterans Affairs that all veterans who are unable to secure and follow a substantially gainful occupation by reason of service-connected disabilities shall be rated totally disabled.  Therefore, rating boards should submit to the Director, Compensation and Pension Service, for extra-schedular consideration all cases of veterans who are unemployable by reason of service-connected disabilities, but who fail to meet the percentage standards set forth in paragraph (a) of this section.  The rating board will include a full statement as to the veteran's service-connected disabilities, employment history, educational and vocational attainment and all other factors having a bearing on the issue.”

  Normally a veteran must be rated at 60% for a single medical issue OR have a total of 70% for several issues, one of which must be rated at least at 40%. The Rating Board may or may not automatically  consider the issue of Individual Unemployability (I/U) withthese percentages even when there is reasonable evidence of lack of employment. In most cases the VA informs the veterans -  that if in fact he or she is actually not working, a VA form 21-8940, a request for unemployability should be sent to the VA. 

  State specifically that you know that you don’t meet the normal requirements under 38 CFR 4.16 for I/U, but that you are in fact not working and not employable because of service connected issues. Do request an extra-schedular rating and provide the evidence they will need. My suggestion here is to not only submit  the VA form 8940, but send in any information from your former employer(s) indicating why they let you go and when. A copy of the law certainly would be helpful. The VA will try to verify the information on documented on the 8940. 

  Act fast and don’t assume your former boss still has the information the VA needs; do provide what you may already have. Many small shops discard employee information after the completion of the first tax year and the new secretary hired since you left can’t think beyond his or her fingernails. So take responsibility here and do not rely on a former boss to rapidly address the need for verification. 

  The word “gainful” in relationship to employment was deliberately high-lighted, because it is a very important key word. A job paying even more than minimum wages supplied by sympathetic family members is not considered to be gainful employment. The veteran in this case would be unemployed if it were not for family. This is often true for charities that find work for the disabled; if it were not for the charity and a sympathetic employer, the vet would not be working.

  Another thought to consider when gathering your evidence for the VA; are there any benefits coming in from the Social Security Administration or other such agencies? This is useful information for building and supporting your claim. 

  So tying this all together, do get all pertinent evidence of actual unemployment, do have the medical records and/or statements show that that the results of your military service do prevent  gainful employment. Finally, do identify where all the medical treatment records are so that the VA can attempt to get them. By law they have to try or notify you of their failure to get them.

  As for Butch, there are many more issues he has to deal with that are not discussed here, but he and I would like to hear from you and let us know of any your experiences with an extra-schedular rating claim, what worked and what didn’t. Have a great New Year.




Individual Unemployability as Defined by Former Undersecretary of Benefits, Daniel L. Cooper

One of the best definitions of the Individual Unemployability benefit (TDIU or 100% IU) is in a speech given by Danial L. Cooper, former Undersecretary for Benefits. If you'll take the time to carefully read his detailed explanation of the benefit, you'll understand why there is such a thing and how it may be achieved.

This is what he had to say;

October 27, 2005 Mr. Chairman and members of the Committee: 

Thank you for the opportunity to review with you the issue of Individual Unemployability (IU).  I will discuss what IU is, its history, the criteria used to determine eligibility, the number of veterans receiving IU benefits, the May 2005 study by the Inspector General (IG) of state variances in average annual compensation, and other issues. 

I am pleased to be accompanied by Ms. Renée Szybala, Director of VA’s Compensation and Pension Service, and Ms. Judith Caden, Director of VA’s Vocational Rehabilitation and Employment Service.

What Is IU

Individual Unemployability or IU is the basis on which the Department of Veterans Affairs pays service-connected disability compensation at the rate payable for a 100-percent evaluation to qualified veterans with combined evaluations that are less than 100 percent.   Regional office decision-makers assign IU ratings when veterans meet minimum combined evaluation criteria and, in the judgment of the rating official(s), are unemployable due solely to their service-connected conditions. 

In exceptional circumstances, regional offices may refer cases that fail to meet the minimum combined evaluation criteria to the Director of the Compensation and Pension Service for consideration of an IU rating. Authority Section 1155 of title 38, United States Code, charges the Secretary with responsibility for developing and applying a disability rating schedule that is based, “as far as practicable,” upon the average impairments of earning capacity resulting from service-connected disabilities.  

Recognizing that the intent of the rating schedule is to fairly compensate veterans for their disabilities to the extent to which they impair earning capacity of the average veteran, the schedule none-the-less cannot always adequately compensate an individual veteran in his or her particular circumstance.  To address the inevitable situations where the schedule does not adequately address a particular fact pattern, the schedule adopted by the Secretary provides both IU and extra-schedular provisions.

Brief History of IU

In 1925, the Schedule for Rating Disabilities provided the first definition of total disability. Total disability was defined as an impairment of mind or body that is sufficient to render it impossible for the average person to follow a substantially gainful occupation. In 1934, total disability was expanded to provide that total disability ratings may be assigned without regard to the specific provisions of the rating schedule when the veteran is, in the judgment of the rating agency, unable to follow a substantially gainful occupation as a result of the veteran’s disabilities. 

To be eligible for consideration for IU benefits, the schedule required that a veteran have a single 70 percent evaluation or, if the veteran had multiple service-connected conditions, that the minimum combined evaluation be 80 percent with at least one disability considered 60 percent disabling.

In 1941, the minimum requirements for consideration for IU entitlement were revised to today’s standard of 60 percent for a single disability or a combined 70 percent evaluation with at least one 40 percent disability.

Throughout the rating schedule, a 60 percent evaluation or higher reflects significant disability.  A 40 percent evaluation assigned to a condition generally reflects a serious handicap.  Therefore, when multiple service-connected conditions are involved, the higher 70 percent minimum combined evaluation is reasonable to allow for the interplay of multiple disabilities.

The 1945 rating schedule established that age was not to be considered a factor in evaluating service-connected disability, and that entitlement to IU could not be based on advancing age or additional non-service-connected disability. Under VA regulations, if a veteran’s earned income does not exceed the amount established by the U.S. Department of Commerce, Bureau of the Census, as the poverty threshold for one person, currently $9,570, the veteran is only marginally employed, and marginal employment does not qualify as substantially gainful employment. 

Also, the U.S. Court of Appeals for Veterans Claims held in Faust v. West that employment that provides annual income exceeding the poverty threshold for one person, irrespective of the number of hours or days actually worked and without regard to the veteran’s annual earned income prior to the award of the IU rating, constitutes "actual employability."

Number of IU Beneficiaries 

The number of veterans rated totally disabled based on IU has more than doubled in the past six years from 97,275 veterans in 1999 to over 221,000 veterans today. There is no single clear explanation for the increase in IU ratings over the last six years.   However, the rise has occurred concurrent with other significant changes.  Since September 30, 1999, the number of veterans receiving compensation has increased from 2,252,980 to 2,636,979 at the end of fiscal year 2005.  This increase of 383,999 veterans represents a 17 percent rise in the number of veterans receiving compensation. 

There has also been an increase in the average combined disability evaluation over the same period.  At the end of 1999, 57 percent of all veterans receiving compensation had combined evaluations of 30 percent or less.  Today it is 46 percent.  The percent of veterans with combined evaluations of 60 percent disability or more has increased from 17 percent at the end of 1999 to the current 29 percent.  An interplay of advancing age, diabetes, and various presumptions of service connection for cancers associated with herbicide and radiation, as well as a significant increase in the number of veterans awarded service-connection for PTSD, account for a substantial portion of the increase. Recent court decisions have also had an impact on IU ratings.  

For example, in 1999, the U.S. Court of Appeals for Veterans Claims in Norris v. West held that VA must infer a claim for IU if the veteran files a claim for increased disability, meets the schedular minimum combined evaluation criteria, and there is evidence of inability to engage in substantially gainful employment due to service-connected disability.

Interplay with Vocational Rehabilitation and Employment (VR&E)

In its September 1987 report, “Improving the Integrity of VA’s Unemployability Compensation Program,” the then General Accounting Office (GAO) recommended that VA revise its regulations to require that all veterans applying for a total disability rating based on IU be referred for a vocational rehabilitation evaluation. VA does not currently require an employment assessment by VR&E program staff as part of the IU entitlement determination.   If the Secretary decided to require an employment assessment in connection with determining a veteran’s entitlement to IU, VA would first promulgate regulations defining the scope, purpose, and criteria for conducting such an assessment, and the manner in which VA would implement such assessments. A veteran’s participation in a program of rehabilitation, education, or training does not preclude a total disability rating based on IU. 

Veterans with compensable service-connected disabilities, including those with IU ratings, may be entitled to receive vocational rehabilitation benefits under the VR&E program (chapter 31, title 38, United States Code).  VA also may not deny a veteran’s IU claim on the basis that he or she is participating in a Veterans Health Administration (VHA) program of therapeutic and rehabilitative services, or consider therapeutic and rehabilitative activities as evidence of a veteran’s ability to secure or follow a substantially gainful occupation.  Our regulations allow a veteran receiving IU benefits to work 12 consecutive months in substantially gainful employment before any change is made in the IU determination.


Additional Benefits

A total disability rating based on IU can result in eligibility for additional benefits for a veteran’s dependents and survivors.  Educational benefits for the veteran’s spouse and eligible children are available under the Survivors’ and Dependents’ Educational Assistance Program (title 38, United States Code, Chapter 35).  The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) provides reimbursement to eligible dependents for most medical expenses, provided that they are not also eligible for health care benefits provided by the Department of Defense.  To be eligible for both of these benefits, the veteran’s IU determination must be considered permanent.  Permanency for eligibility to Chapter 35 and CHAMPVA requires that there not be a future examination scheduled.

Application Process

In most cases, to be considered for IU benefits, a veteran must apply.  However, in the Norris case mentioned earlier, the court held that a veteran need not apply for IU for a claim for IU to be inferred.  Thus, VA is required to consider the issue in certain circumstances, even if the veteran did not explicitly apply for an IU rating.  Recent guidance to the field directed that, once an IU claim is inferred, an application must be sent to the veteran for completion in order to obtain the essential information requested on the application form.  The form asks the veteran to furnish an employment history for the five-year period preceding the date on which the veteran became unemployable, as well as from that date to the date of application. As part of the development of IU claims, field stations are also required to solicit information from each employer during the 12-month period preceding the date the veteran last worked.  The employer is asked to provide information concerning the veteran’s employment history including the date of employment, the type of work performed, and if the veteran is not currently working, the reasons for termination of employment.


Role of the Medical Examiner

If the rating official determines that a medical examination is necessary to determine whether a veteran is entitled to a total disability rating based on IU, an appropriate examination or opinion request is submitted to a VHA medical facility or our contract examination provider. Medical examiners follow the appropriate worksheets to perform a complete and adequate examination for rating purposes, answering all questions and providing opinions as requested.   A diagnosis is to be provided for every condition listed on the examination request.  The medical examiner should describe the disability’s effect on the veteran’s daily activities and ability to work.  For IU claims, the examiner should also obtain the veteran’s occupational history (i.e., type of occupation, employment dates, wages for last 12 months, and detail any time that was lost from work in past 12-month period).

Continued IU Eligibility

Once a veteran is awarded IU benefits and until he or she attains age 70, the veteran is required to submit an annual employment certification.   This procedure was resumed in September after having been suspended for approximately six years.  The veteran must list all employment for the preceding 12-month period.  VA uses the certification to verify continued entitlement to IU benefits.  Failure to return the form will cause VA to send the veteran a contemporaneous notice of reduction of the monthly benefit payment to the rate justified by the underlying rating. VA may schedule a reexamination for any veteran when VA determines there is a need to verify the continued existence or current severity of a disability.  

Generally, VA requires reexamination if it is likely that a disability has improved or if evidence indicates that a disability has materially changed or that the current rating may be incorrect.  Periodic future examinations are not requested if the disability is unlikely to improve, if symptoms have persisted without material improvement for a period of five or more years, where the disability is permanent in character, or in cases where the veteran is age 55 or older. 

After a veteran has received compensation at any level of disability for 20 years, to include total disability benefits based on IU, that compensation rate is protected. 

Veterans receiving IU benefits are subject to VA’s annual income verification match (IVM).   The IVM uses Internal Revenue Service (IRS) and Social Security Administration (SSA) income records to verify that IU beneficiaries remain below the earnings threshold for entitlement to IU benefits.

Reviews of VA Claims Processing Related to IU

Former Secretary Anthony J. Principi, in response to media articles about state-to-state variance in average compensation payments to veterans, requested that the VA Inspector General (IG) study the payment variance issue.  The IG found that payment variance was affected by several factors including demographic factors and representation by veterans service organizations, as well as the incidence of PTSD and the subsequent award of IU benefits for that condition. The Government Accountability Office (GAO) also issued a report in 2004 pointing to a need for increased analysis of the consistency of decision-making across regional offices.  GAO is currently conducting a study of IU benefit decision-making. Based on the preliminary findings from these reviews, as well as a significant increase in the number of IU case referrals received in the latest IVM with IRS and SSA, we have been analyzing our existing IU procedures and regulations to determine if changes are needed.  As discussed earlier, we have reinstated the annual employment certification for veterans receiving IU benefits. 

We have also reinforced existing procedural and evidentiary guidelines for IU determinations through conference calls with our field stations and at our recent Veterans Service Center Managers Conference.  We will continue to work to provide additional training for our employees, and to identify ways to strengthen and clarify our long-standing procedural requirements and ensure the integrity of this important benefit.

The IU benefit has a long history.  It fills a critical gap when the rating schedule fails to fully address the impact of disability in a specific veteran’s circumstance.  We believe that during this period of conflict and danger for our country, IU continues to be an essential tool in serving America’s veterans and fulfilling the country’s commitment to them.  We at VBA are fully cognizant of this as we work to ensure those who have served this nation are fully compensated for their injuries and assisted in returning to participation in society to the maximum extent possible permitted by their injuries.

Thank you for this opportunity to discuss this important benefit.   I would be pleased to address any questions you may have.
Jim Strickland
Thom Stoddert