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5.7. Schedular Rating 100%-TDIU or Indiviual Unemployability
In some cases, however, a veteran with less than a 100% scheduler rating is so affected by service-connected conditions that he or she cannot work at gainful employment. The law allows for another type of claim in such a case.
VA benefits are available to compensate a veteran at the 100% level if he or she is not able to work because of service-connected conditions even without a 100% schedular rating. This benefit is called "total disability on the basis of individual unemployability", ("TDIU"), or sometimes "individual unemployability, " ("IU").
The key issue in a TDIU claim is the inability of the veteran to engage in "substantially gainful employment" because of his or her service-connected conditions. "Substantially gainful employment" means to hold a job that pays at least an amount equal to the annual poverty level set by the federal government. In order to qualify for TDIU benefits, a claimant must meet the following requirements:
- If the claimant has only one service-connected condition, that condition must be schedular rated at least 60% or more;
- If the claimant has two or more service-connected conditions, at least one of those conditions must be rated at 40% or more, and the veteran's combined disability rating must be 70% or more; and
- In either case, the veteran must be unemployable because of his or her service-connected conditions.
To establish "unemployability" or "inability to substantially maintain gainful employment", the Veteran must provide:
- evidence of unemployment due to service-connected conditions, employment history records for example, and
- medical evidence that the veteran's service-connected condition renders him or her totally disabled and unemployable, generally a doctor's opinion letter.
Having a paying job does not automatically disqualify a claimant from a TDIU award. If the wages are considered "marginal" (low paying) or "sheltered" (protected from usual requirements) employment are exceptions to the TDIU qualification requirements. Examples of employment that are allowed under TIDU:
- A job that pays substantially less than the prevailing poverty level,
- A job that is protected from requirements that someone else in that position would be expected to satisfy, or
- A job working for a friend or relative, may not be "substantially gainful employment."
Although it is always better to submit a specific claim for TDIU. The VA has a duty to look for potential TDIU claims based on the evidence in the claimant's VA claims file, known as a "C-file". The VA is required to review the claims for TIDU, even if not specifically requested by the Veteran, because entitlement to TDIU is part of every claim for disability compensation. Upon reviewing the claim, the VA determines if TDIU is an appropriate award for the claim. Evidence of unemployability can be submitted after an initial decision denying TDIU, if while a claim for schedular benefits is still being processed.
As with most VA benefits, TDIU is not a permanent benefit. The VA can require a claimant undergo periodic medical examinations to confirm that the claimant remains unable to work due to a service-connected condition. And, as with all VA examinations, a failure to report for a scheduled examination can result in suspension or termination of a TDIU benefit.
In addition, since a TDIU award is also based on "unemployability," the VA can periodically request employment information from a claimant receiving TDIU benefits. The VA will also cross check employment earnings with the IRS.
The TDIU rating could be terminated and the claimant could be liable to repay VA for the TDIU benefits paid since that employment began, if:
- the VA becomes aware that a claimant is working at a job that is not marginal or sheltered,
- A claimant must also be careful in performing volunteer work because the nature and time spent at unpaid work shows that a claimant could be employed and is no longer unemployable.
If a Veteran is determined to be employale, the TDIU award can and will probably be revoked. When a TDIU rating is revoked, a claimant's benefits go back to the amount of compensation payable under the scheduler rating and the VA can make the Veteran repay the TDIU award.
Although it is best to make an explicit claim for TDIU if a claimant believes he or she is eligible, it is no longer required. Potential entitlement to TDIU is part of every claim for disability compensation. See Rice v. Shinseki, 22 Vet. App. 447, 454-55 (2009) (TDIU "is part and parcel of the determination of the initial rating for [a] disability"). It is now well established that the Board must consider "whether a TDIU award is warranted whenever a pro se claimant seeks a higher disability rating and submits cogent evidence of unemployability, regardless of whether he states specifically that he is seeking TDIU benefits." Comer v. Peake, 552 F.3d 1362, 1366 (Fed. Cir. 2009) (citing Roberson v. Principi, 251 F.3d 1378 (Fed. Cir. 2001)); see also Rice v. Shinseki, 22 Vet. App. 447, 453-54 (2009) (same). "[A] request for TDIU, whether expressly raised by a veteran or reasonably raised by the record, is not a separate claim for benefits, but rather involves an attempt to obtain an appropriate rating for a disability or disabilities, either as a part of the initial adjudication of a claim or . . . as a part of a claim for increased compensation." Rice v. Shinseki, 22 Vet. App. 447, 453-54 (2009); see also Floyd v. Brown, 9 Vet. App. 88, 96 (1996) (the question of an extraschedular rating is a component of the appellant's claim for an increased rating). A request for a higher disability rating and evidence indicating that the claimant's ability to work was "significantly impaired" by his or her service connected conditions reasonably raises the issue of entitlement to TDIU as an alternative basis for increased compensation. Id.
VA regulations provide two methods by which TDIU may be granted. Under the first, TDIU may be assigned to a claimant who is "unable to secure or follow a substantially gainful occupation as a result of service-connected disabilities" provided that he has received a disability rating of 60% or greater, or, if he is service-connected for two or more disabilities, at least one of those disabilities has been assigned a disability rating greater than 40%, and the combined disability rating for all disorders is at least 70%. 38 C.F.R. § 4.16(a). If the claimant does not meet these schedular TDIU requirements, a TDIU rating may still be obtained by referral to the director of Compensation and Pension Service for extraschedular consideration when the claimant is unemployable by reason of service-connected disabilities. 38 C.F.R. § 4.16(b).
38 C.F.R. section 3.321(b)(1) provides an alternative method of referring a case for extraschedular consideration when a claimant demonstrates an "exceptional or unusual disability picture with such related factors as marked interference with employment or frequent periods of hospitalization as to render impractical the application of regular schedular standards." Extraschedular consideration under section 3.321(b) is not the same as TDIU under section 4.16(b) because sections 4.16(b) and 3.321(b)(1) are not interchangeable. See Kellar v. Brown, 6 Vet. App. 157, 162 (1994) ("the effect of a service-connected disability appears to be measured differently" by the two regulations). Section 4.16(b) requires evidence of unemployability, while § 3.321(b)(1) requires only "marked interference with employment," which is a somewhat less severe standard. See Thun v. Peake, 22 Vet. App. 111, 117 (2008); see also Stanton v. Brown, 5 Vet. App. 563, 564-70 (issue of extraschedular rating is separate from issue of TDIU rating). In other words, a claimant need not demonstrate total unemployability to obtain a section 3.321(b) extraschedular disability rating.
The term "substantially gainful occupation" is not defined by VA regulation; however, the Court has held that the term refers to, at a minimum, the ability to earn "a living wage." Bowling v. Principi, 15 Vet. App. 1, 7 (2001); Moore (Robert) v. Derwinski, 1 Vet. App. 356, 358 (1991). The Court has also held that a person is engaged in a "substantially gainful occupation" when that occupation "provides annual income that exceeds the poverty threshold for one person." Faust v. West, 13 Vet. App. 342, 355-56 (2000). The M21-1MR states that "voluntary withdrawal from the labor market" is an "extraneous factor" whose "effects" should be "[i]dentif[ied] and isolate[d]" in determining whether the severity of the service-connected conditions preclude a veteran from "obtaining or retaining substantially gainful employment." M21-1MR, pt. IV, subpt. ii, ch. 2, sec. F.27.e. Consequently, voluntary withdrawal from the labor market should not be an automatic bar to TDIU.
In adjudicating an assertion of entitlement to TDIU, the Board must also consider whether the existing VA medical examination reports adequately "address the extent of functional and industrial impairment from the veteran's service-connected disabilities." Gary v. Brown, 7 Vet. App. 229, 232 (1994). Thus, if the Board determines that the existing examination reports are insufficient to assess the matter of TDIU, it should request additional medical evidence before adjudicating the matter.
In resolving a TDIU case, the question is whether the claimant is capable of securing or maintaining a substantially gainful occupation. Although a claimant may be physically able to perform sedentary employment, he or she may not be educationally and vocationally qualified to perform such employment. Although the duty to assist does not require VA to provide a vocational assessment to a claimant seeking a total disability rating based on individual unemployability, a claimant's education and work experience are relevant to the issue of entitlement to such a rating. Smith v. Shinseki, 647 F.3d 1380, 1386 (Fed. Cir. 2011).
Specifically, it is within VA's discretion to determine whether a vocational assessment was required based on "the facts of a particular case" and an assessment would be required "if, for example, the veteran were found medically qualified for a particular type of job, but there was an unusually difficult question as to whether the veteran had the educational or vocational skills for that position." Id. Accordingly, Smith does not require VA to provide a vocational assessment in every instance where a claimant is seeking a total disability rating based on individual unemployability, but it does require VA to at least consider whether a vocational assessment is required and to support its determination that one is not required with an adequate statement of reasons or bases. Id.; see also 38 U.S.C. § 7104(d)(1) (requiring the Board to provide a written statement of the reasons or bases for its "findings and conclusions on all material issues of fact and law presented on the record").
If a claimant does not meet the schedular rating for unemployability provided in 38 C.F.R. § 4.16(a), he may still be granted TDIU on an extraschedular basis. 38 C.F.R. § 4.16(b). The central inquiry "is whether that veteran's service-connected disabilities alone are of sufficient severity to produce unemployability." Hatlestad v. Brown, 5 Vet. App. 524, 529 (1993). In making its decision, VA may consider the veteran's education, special training, and previous work experience, but may not take into consideration any impairment caused by non-service-connected disabilities. See 38 C.F.R. §§ 3.341, 4.16, 1.19. The Board's determination as to whether a claimant is unable to secure and hold substantially gainful employment is a finding of fact that the Court reviews under the "clearly erroneous" standard. Bowling v. Principi, 15 Vet. App. 1, 6 (2001).
Although the Secretary and the Board can separate parts of a claim and develop and adjudicate them separately, see Fagre v. Peake, 22 Vet. App. 188, 191 n.4 (2008) (noting the Secretary is free to "issu[e] separate Board decisions with regard to each, some, or all disabilities claimed by a veteran"), TDIU remains a component of an increased rating claim for any period not adjudicated separately, and the Board has jurisdiction over the issue as long as it has jurisdiction over an increased rating claim. See Rice v. Shinseki, 22 Vet. App. 447, 453-54 (2009). Evidence of unemployability subsequent to a decision denying TDIU and while a claim for increased benefits is still being processed may lead to an award of TDIU for the time period under adjudication. If TDIU is not warranted pursuant to 38 C.F.R. section 4.16(a), the matter of a TDIU rating may still be referred to the director of Compensation and Pension Service for extraschedular consideration when it is found that the claimant is unemployable by reason of service-connected disabilities. 38 C.F.R. § 4.16(b).
"Evidence of unemployability," does not equate to "100% unemployable." Roberson v. Principi, 251 F.3d at 1378, 1384-85 (Fed. Cir. 2001). Instead, an appellant is not required "to show 100[%] unemployability in order to prove that he cannot 'follow substantially gainful occupation.'" Id. Section 4.16(a) also indicates that "[m]arginal employment shall not be considered substantially gainful employment." Marginal employment includes employment in a "protected environment" including a "sheltered workshop." 38 C.F.R. § 4.16(a).