Total Disability based on Individual Unemployability (TDIU) and Marginal Employment

For many veterans, their individual or collective disabilities prevent them from working. In these scenarios, the VA can award compensation for total disability ratings based on unemployability of the individual, or TDIU. This is covered by 38 CFR § 4.16, and results in the veteran being paid at the 100% amount.

To be awarded TDIU, a veteran cannot be capable of substantially gainful employment. The VA has allowed employed veterans to receive TDIU if their employment is “marginal.” If a veteran is only capable of marginal employment, he or she is not be capable of substantially gainful employment. Marginal employment can occur in two scenarios. First, it is when a veteran earns less than the poverty threshold for as established by the U.S. Department of Commerce, Bureau of the Census.

The second type of marginal employment is broader, and can exist when a veteran’s earned annual income exceeds the poverty threshold. This determination is based on the individual facts of each case. There is no list of set criteria for the VA to consider for marginal employment, but a review of the law and various cases can provide some guidance.

Under § 4.16, the VA ought to review factors such as limited employment, and protected environments like a family business or sheltered workshop. This means TDIU can be appropriate when there are a number of protections that would not be regularly expected in an ordinary employment setting. The VA put forth these examples because additional protections are more typical when an employer is a family member or a charitable or government-sponsored workshop. Still, the actual protections afforded are what control a “marginal employment” determination.

Cases such as Schmitt v. McDonough detail that the VA should review the nature and scope of a veteran’s employment, including limited hours, and excessive absences. No. 21-5741, 2022 U.S. App. Vet. Claims LEXIS 1776, *7 (Vet. App. Oct. 31, 2022). In that case, the veteran was permitted to work reduced hours and missed many days each month due to his service-connected condition. Additional considerations may include the scope of responsibilities and protections, and potential loss to the employer. See Cantrell v. Shulkin, 28 Vet. App. 382 (2017). These considerations and more can show that a veteran may be able to maintain marginal employment, but not substantially gainful employment.

The above examples are not exhaustive. The ultimate question is if a veteran is “capable of performing the physical and mental acts required by employment,” even if some employment exists. See Van Hoose v. Brown, 4 Vet.App. 361, 363 (1993). If a veteran is not capable of performing the required tasks, but is still employed with certain protections, then TDIU should be granted.

If you believe that the VA has improperly denied your claim for TDIU and would speak to an attorney for free, please you can call our intake team at 877-838-1010 for a free case evaluation.