January 01, 2018 GPSolo

What Is VA Individual Unemployability and Why Is It So Important?

Matthew Hill

Abraham Lincoln best described our duty to our veterans: “To care for him who shall have borne the battle and for his widow, and his orphan.” As part of its charter, the Department of Veterans Affairs (VA) compensates veterans and their dependents for illnesses or injuries sustained or aggravated during active military service. Veterans, including reservists, who served active duty and were discharged under any condition other than dishonorable are eligible to file for disability compensation. (The VA also awards non-service-connected compensation for veterans who are disabled but the disability is not related to service; this separate program will not be discussed here.) Service-connected disability benefits are predicated on the event, illness, or injury incurred or aggravated during active duty. Importantly, the injury or illness need not have been caused by military service. The relationship is temporal, not causal—the incident just needs to have happened while the veteran was on active duty (38 C.F.R. 3.303(a)).

Furthermore, for compensation purposes, a veteran is on active duty 24 hours a day, seven days a week. A service member is equally eligible for service-connected benefits whether he is in a car accident while on vacation or is injured while jumping out of a helicopter in combat. The VA also recognizes claims for disabilities aggravated by service and disabilities secondary to already-service-connected claims (e.g., diabetic neuropathy secondary to diabetes mellitus). Even though some of these conditions do not arise until years after service—decades, even—so long as a veteran can show the disability is related to or incurred in service, the temporal distance between service and the claim does not matter.

How Is the Amount of Compensation Determined?

Once the VA concedes that a disability is related to service, the discussion turns to the rating. The underlying principle for VA disability ratings is that the rating is based on the degree to which the disability interferes with the veteran’s ability to work (38 C.F.R. 4.1). Disabilities are rated from 0 percent to 100 percent, usually in increments of 10 percent. The degree the veteran is rated is based on the level of impact the condition has on employability. Therefore, a 0 percent rating indicates no loss of employment, where 100 percent would indicate that a veteran has a complete loss of employability. (It is not a requirement for a veteran to be unable to work to receive a 100 percent.) The veteran is awarded a rating for each disability that is service connected. The ratings are combined to give the overall rating for which the veteran is paid. The individual ratings are not added; instead, the VA uses what it calls the whole body impairment approach. Essentially, if a veteran has several ratings, the VA starts with the first one and looks at how it reduces the veteran’s health and goes from there. For example, if a veteran has a 40 percent rating, then the VA considers him 60 percent healthy. If the veteran receives a subsequent rating of 20 percent for another condition, it would be 20 percent of the 60 percent that he is still healthy, not 20 percent of 100 percent. This would result in a combined rating of 50 percent (20 percent of 60 equals 12 and then round to the nearest ten). Had the ratings been added together he would have received a 60 percent combined rating. The closer the veteran’s combined rating gets to 100 percent, the harder it is to move up a rating.

Take the veteran with the following ratings:

  • 50 percent rating for post-traumatic stress disorder (PTSD)
  • 50 percent rating for a back injury
  • 50 percent rating for sleep apnea
  • 40 percent rating for diabetes
  • 20 percent rating for radiculopathy

If you added his ratings together you would get 210 percent. However, his combined rating would be 94 percent, which rounds down to 90 percent. (See 38 C.F.R. 4.25 for table; for calculator, see http://hillandponton.com/va-disability-calculator.)

The rating percentage has a drastic effect on compensation. Even though rating percentages move in 10 percent intervals, compensation is not linear. As of December 2017, a 90 percent rating for a single veteran was $1,783.68, while if rated at 100 percent, the veteran would receive $2,973.86 (http://tinyurl.com/y7o5ral9). Put another way, a 90 percent rating is only 60 percent of the compensation of a 100 percent rating.

The VA has recognized that obtaining a 100 percent rating is difficult. As a result, the VA has an additional rating called individual unemployability (IU), which does not require the veteran to be 100 percent disabled (38 C.F.R. 4.16). However, if the veteran cannot work owing to her service-connected disabilities, then she receives 100 percent compensation. So even where a veteran is rated 70 percent, if she cannot work as a result of that disability, then the VA will pay her 100 percent compensation.

The VA determines IU based on a veteran’s ability to “secure and maintain substantially gainful” employment. To secure and maintain substantially gainful employment means that the veteran must be able to get and keep a job, and this job must meet certain criteria to be considered a competitive job and not sheltered work. Just because a veteran cannot find a job does not mean he is unemployable. Identifying what keeps him from working is the key to winning a benefits claim.

Criteria for Individual Unemployability

Veterans who apply for IU must have service-connected disabilities keeping them from securing and maintaining employment. IU can be based on one or a combination of several service-connected conditions.

Importantly, the VA cannot consider non-service-connected disabilities when analyzing whether a veteran should receive IU; the VA must solely focus on whether the service-connected disabilities alone would prevent the veteran from maintaining a job. Take a veteran who is 70 percent service connected for PTSD who is not working and was found unable to work by the Social Security Administration owing to a non-service-connected back injury. The VA cannot deny this claim because a non-service-connected disability keeps the veteran from working. The law dictates that the VA look solely to the effects of the PTSD to see if that would keep the veteran out of the workforce.

A veteran applying for IU must not be able to secure or maintain substantially gainful employment. This means that a veteran must be unable to get a job or keep one for any length of time (e.g., a veteran who has PTSD and cannot keep a job for more than a few weeks because he is always getting into conflicts with supervisors). The criterion is the ability to actually do a job and do it consistently. The VA will frequently say a veteran with a physical or mental condition is able to do “sedentary” work; however, the VA often fails to take into account issues such as decision-making ability, effective working relationships with coworkers, absenteeism for treating a condition, dealing with stress, and myriad other considerations that take place in today’s workplace. All these issues should be taken into consideration when working on a claim for IU.

Being employed does not preclude a veteran from receiving IU. Sheltered employment is defined as work for one “not capable of working in a competitive employment setting.” These specialty positions, though difficult to prove, allow veterans to continue to work and gain a sense of productivity. Another type of employment is “marginal employment.” This is when the veteran’s income is below the national poverty threshold: the “earned annual income does not exceed the poverty threshold for one person established by the US Department of Commerce, Bureau of the Census” (38 C.F.R. 4.16(a)).

Schedular Requirements for IU

Through 38 C.F.R. 4.16, the VA lays out the requirements of the combined disability rating the veteran must have to qualify for IU. A veteran can qualify several ways, including:

  • one service-connected condition rated greater than or equal to 60 percent;
  • two or more service-connected conditions with at least one condition rated 40 percent or greater and a combined rating greater than or equal to 70 percent;
  • the following combinations of conditions, which may be considered a “single disability”:
    • disabilities of one or both upper extremities, or lower extremities;
    • disabilities resulting from a common etiology or single accident;
    • disabilities affecting a single body system (e.g., orthopedic, respiratory);
    • multiple injuries incurred in action; and/or
    • multiple disabilities incurred as a prisoner of war.

There are exceptions to the rules. If a veteran has a condition rated lower than the required level but can prove that the condition prevents her from working, the VA will consider IU. An example is a condition that has limits on its rating levels. Migraines, according to rating code, can only be rated at 50 percent or lower. However, it is possible to prove unemployability owing to migraines without meeting the above rating criteria.

The VA cannot take into account non-service-connected conditions, conditions that are pending service connection but not yet granted, or the veteran’s age.

Filing for Individual Unemployability

The VA requires any veteran applying for IU to file a specific form, the VA 21-8940. A veteran should be prepared to submit evidence with the claim or upon request by the VA. This evidence includes:

  • employment history, including dates of employment and income;
  • evidence of unemployment; this can include (but is not limited to):
    • medical documentation, including workers’ compensation related to the service-connected condition;
    • lay statements from friends/family/coworkers;
    • termination notices; and/or
    • vocational rehabilitation evaluations;
  • educational history, prior and post-employment; and
  • Social Security Disability Insurance records (if receiving SSDI for a service-connected condition).

Effective Date

The effective date (the date the compensation begins) is the date the veteran filed or the date of diagnosis, whichever was later. There are myriad exceptions. With IU claims, the date is usually tied to the date of the claim for the underlying disability. For example, if the veteran has filed a claim for increased rating for PTSD and it is determined in this process that the veteran can no longer work owing to the disability, then the veteran should be granted IU back to the date of the increased rating claim. However, the veteran is still required to submit VA 21-8940 for the claim to be granted.

Appealing a Denial

Veterans should always appeal a wrongly denied claim. For a rating decision, appeals must be completed within one year of the date the VA issues the notice of the decision. Therefore, if the VA denies the claim on January 15, 2017, the veteran must appeal no later than January 15, 2018. The importance of appealing is to preserve the effective date of the claim. If a year passes and a new claim is filed, the effective date is now the date of the new claim, not the original claim. (There are other types of decisions that veterans face, namely a Statement of the Case and a decision from the Board of Veterans’ Appeals; each decision has its own filing deadlines.) Typically, when veterans appeal, their case will be reviewed by more seasoned adjudicators than those who do initial decisions.

Maintaining an IU Rating

An IU rating is not guaranteed forever. The VA will often review the case periodically, and veterans will be required to turn in validation of their current employment status on a regular basis. To ensure that they are able to maintain their rating, veterans should keep up consistent treatment, ensure they do not compromise their eligibility, and be honest with the VA. Veterans who exaggerate their symptoms at compensation and pension (C&P) review exams are at risk of the VA reducing their benefits.

Remember the VA rating system is predicated on evaluating how veterans’ service-connected disabilities affect their ability to work. The VA recognizes that its individual rating codes and non-arithmetic math can leave veterans with a rating that does not fully compensate them for their disabilities. When veterans cannot work owing to their disabilities, they should apply for individual unemployability.

Matthew Hill is an author and attorney who focuses his practice on representing disabled veterans and their dependents across the nation. He has consulted with more than 10,000 veterans with claims in the VA service-connected disability compensation process and has written several books on VA service-connected benefits, including The Road to VA Compensation Benefits (2014), which has more than 20,000 copies in circulation. He gives nationwide presentations on VA disability compensation. He is the treasurer for the board of directors of the National Organization of Veterans' Advocates.