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What Substantially Gainful Employment Means for TDIU Claims

Posted by Gregory M. Rada | State Veteran Benefits

A claim for a total disability rating based on individual unemployability (TDIU or IU) hinges on whether a service-connected disability or disabilities render a veteran unable to secure or maintain substantially gainful employment. What does substantially gainful employment mean?

Understanding Substantially Gainful Employment

38 C.F.R. § 4.16 does not define the term substantially gainful employment, but the VA defines it in their internal operating manual as “employment at which non-disabled individuals earn their livelihood with earnings comparable to the particular occupation in the community where the Veteran resides.” This definition, however, is not a binding definition.

In Faust v. West, the United States Court of Appeals for Veterans Claims concluded that a “substantially gainful occupation” is an occupation that provides a veteran with “an annual income that exceeds the poverty threshold for one person, irrespective of the number of hours or days that the veteran actually works . . .” As of 2022, the annual individual poverty threshold set by the federal government is $13,590.

There is, however, an exception to the poverty threshold rule, known as the “protected work environment” exception. This exception allows a veteran to receive TDIU even when they earn above the poverty threshold if they can show that their employment is performed in a protected or sheltered work environment. There’s no exact definition of what constitutes a protected work environment, but it is a type of job where you work at a family business, or are self-employed, or your employer makes accommodations for you that it would not make in their normal course of business for other employees.

TDIU claims involving protected or sheltered work environments are the most difficult to win. You have to show the VA that you would not be able to maintain employment at a competitive work environment, and that you’re only able to work in a sheltered work environment such as a family business because your family won’t fire you despite the shortcomings caused by your service-connected disabilities.

How to Make a Claim for TDIU Benefits

If your service-connected disabilities make you unable to work, or only able to maintain employment in a protected or sheltered work environment, or only able to work where you earn less than the poverty threshold for one person, then you should start a claim for TDIU benefits by filing a VA Form 21-8940 with the VA.

Be aware that it is very common for the VA to deny initial claims for TDIU benefits. This happens for two reasons. First, the VA denies you with the hopes that you go away and return to work. Put another way, they use the initial denial as a screening measure to see who is serious. Second, the VA relies on medical professionals to give opinions about whether a veteran can work or not. This is problematic because medical professionals are not trained or qualified to give opinions about whether a veteran meets the basic requirements to maintain employment in a competitive work environment.

So, do not get discouraged if your initial claim for TDIU benefits is denied because it is very common.

If your IU claim is denied, I recommend hiring an attorney that can help you appeal and develop the evidence needed to win a TDIU appeal. A good VA benefits attorney will work with vocational experts that can perform a vocational assessment on you and give their opinion as to how and why your service-connected disabilities make you unable to work. A well-supported vocational assessment is usually the key to winning an appeal for individual unemployability benefits.

I Can Help With Your TDIU Claim

Unfortunately, many veterans don’t get the compensation they deserve, especially when it comes to TDIU benefits. That’s where I come in — I get in the driver’s seat and do everything that’s needed to win your claim for IU benefits. Contact me today for a free consultation.

Frequently Asked Questions (FAQs)

Will I automatically qualify for TDIU benefits if I can’t work?

No. The evidence of record must show that your service-connected disabilities render you unable to work. The type of evidence required is usually a medical or vocational opinion.

After filing an initial TDIU claim, how long will it take for VA to issue a decision?

In my experience, the VA is currently averaging anywhere from 30 to 120 days to issue decisions for initial claims for individual unemployability.