VA Must Consider Whether an Unemployable Veteran Can Perform “Marginal Employment” to Decide a TDIU Claim
Individual Unemployability – TDIU – Explained
Many disabled veterans may be entitled to 100% VA service connected compensation payments, even when VA rates their disabilities less than 100%. Through an extraschedular rating called “Individual Unemployability,” often abbreviated “TDIU” which stands for “Total Disability based on Individual Unemployability,” veterans can be paid at the 100% level if they are unable to secure or follow a substantially gainful occupation as a result of service-connected disabilites. The key is that it must be the veteran’s service connected disability or disabilities that prevent their ability to work in some substantially gainful occupation. The VA regulation which describes the TDIU benefit is 38 C.F.R. Section 4.16. Unfortunately, 4.16 does not define “substantially gainful occupation,” but it does tell us what does not count as substantially gainful, that is “marginal employment.” The bottom line is that veterans may work and earn some money, but still qualify for Individual Unemployability…as long as they can only do marginal employment.
What is “marginal employment”?
Fortunately, Section 4,16 does define what marginal employment is. It plainly explains that
marginal employment generally shall be deemed to exist when a veteran’s current 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.
So marginal employment is any work that earns below the poverty threshold. In 2017, that amount was just over $1000 per month for an individual under age 65. The amount increase for a household depending on the number of related children living with the veteran. Click this link to see the Census Bureau’s past poverty threshold figures.
This is an important point: a veteran can earn money and still receive an extraschedular total rating at the 100% level, as long as the money they earn is less than the poverty level.
Vets can even make more than the poverty threshold, but still be limited to marginal employment.
Meeting the poverty threshold is not the only way for a veteran to prove that he or she cannot do more than marginal employment. Section 4.16 also explains that the facts of a veteran’s particular situation may show that they are in a limited employment situation, such as the protection of a family business or a sheltered workplace. This is possible even when the veteran is earning more than the poverty threshold.
This is another important point: a veteran can earn money and still receive an extraschedular total rating at the 100% level, even when it is more than than the poverty level if the employment is protected or sheltered.
VA will often not consider if a veterans is limited to marginal employment when evaluating TDIU.
The Department of Veterans Affairs will often summarily decide that a veteran is employable. VA’s Compensation & Pension (C&P) examiners – the doctors they send you to to decide if you are disabled – seem to think everyone is employable. The problem is that VA rarely gives Unemployability much thought beyond that.
In a recent case that went to the U.S. Court of Appeals for Veterans Claims in Washington, D.C., the VA actually took the position that it did not need to even consider marginal employment if the veteran was not working at all. In Ortiz-Valles v. McDonald, the VA claimed that Section 4.16 did not require the Secretary of Veterans Affairs to evaluate at marginal employment when a veteran was not working. The VA’s position was that Section 4.16 only required VA to look at marginal employment for someone that was actually working. The problem with that….is that Section 4.16 does not say anything at all about working or not working.
VA must evaluate whether a veteran is capable of doing more than marginal employment.
A panel of judges on the veterans court rejected VA’s argument, and held that VA has a duty to consider marginal employment “if the facts of the case reasonably raise the issue of whether the veteran’s ability to work might be limited to marginal employment.” When a TDIU claim is denied, and the facts show that kind of limitation, the Board of Veterans appeals has an affirmative obligation to “explain why the evidence does not demonstrate that the veteran is incapable of more than marginal employment.” The VA cannot fulfill its obligation to explain why a veteran would be able to obtain or maintain a substantially gainful occupation if it does not explain why the veteran cannot do more than a marginal level of employment.
If a veteran is limited to marginal employment, they are entitled to a total disability rating for TDIU.
If a veteran is in fact limited to being able to do no more than marginal employment, Section 4.16 requires the VA to conclude that the vet is not capable of securing or following a substantially gainful occupation. In other words, if a veteran’s service connected disabilities limit the veteran to being able to do no more than marginal employment, they are entitled to a total disability rating based on individual employability.
CASE: Ortiz-Valles v. McDonald, No. 14-2540 (Vet.App. May 20, 2016).
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