In This Section

Introduction

• establishing entitlement to a total disability based on IU (TDIU)
• unemployable vs. unemployed, and
• components of inability to secure or follow a substantially gainful occupation.

Change Date

VIII.iv.3.A.1.a.  Establishing Entitlement to TDIU

• meet the schedular requirements of 38 CFR 4.16(a), or
• have an extra-schedular IU evaluation, under the provisions of 38 CFR 4.16(b), approved by Compensation Service. 

• IU is also referred to as total disability based on individual unemployability (TDIU).
• Marginal employment (to include employment in a protected environment), does not preclude a Veteran from eligibility to IU benefits.  

• establishing an effective date for IU benefits, see
  • 38 CFR 3.400(o)(2)
  • Rice v. Shinseki, 22 Vet.App. 447 (2009)
  • Dalton v. Nicholson, 21 Vet.App. 23 (2007), and
  • Hurd v. West, 13 Vet. App. 449 (2000)
• submitting compensation claims for extra-schedular consideration, see
  • M21-1, Part VIII, Subpart iv, 3.C.4.b, and
  • M21-1, Part V, Subpart ii, 3.D.4.c, and
• marginal employment, see M21-1, Part VIII, Subpart iv, 3.A.2.c and d.

VIII.iv.3.A.1.b.  Unemployable Vs. Unemployed

VIII.iv.3.A.1.c.  Components of Inability to Secure or Follow a Substantially Gainful Occupation

• economic, as discussed in M21-1 VIII, Subpart iv, 3.A.2, and
• non-economic, as discussed in M21-1, Part VIII, Subpart iv, 3.A.3.

• the components necessary to establish the inability to secure or follow a substantially gainful occupation, see Ray v. Wilkie, 31 Vet.App. 58 (2019)
• completing a decision concerning entitlement to IU, see M21-1, Part VIII, Subpart iv, 3.C.3, and
• how to address economic and non-economic components of an IU
• determination in the rating decision, see
  • M21-1, Part VIII, Subpart iv, 3.C.1.a, and
  • M21-1, Part VIII, Subpart iv, 3.C.3.

Introduction

• economic component of an IU determination
• definition of substantially gainful employment
• definition of marginal employment
• circumstances for considering marginal employment
• definition of protected environment, and
• examples of protected environments.

Change Date

VIII.iv.3.A.2.a.  Economic Component of an IU Determination

• substantially gainful, as defined in M21-1, Part VIII, Subpart iv, 3.A.2.b, or
• marginal (to include employment in a protected environment), as defined in M21-1, Part VIII, Subpart iv, 3.A.2.c and e.

VIII.iv.3.A.2.b.  Definition: Substantially Gainful Employment: 

• competitive (not protected) employment, and with
• earnings exceeding the amount established by the U.S. Department of Commerce, U.S. Census Bureau, as the poverty threshold for one person.

Reference:  For more information on the definition of substantially gainful employment, see

• Faust v. West, 13 Vet.App. 342 (2000), and
• Moore v. Derwinski, 1 Vet.App. 83 (1991).

VIII.iv.3.A.2.c.  Definition:   Marginal Employment

• when a Veteran’s earned annual income does not exceed the amount established by the U.S. Department of Commerce, U.S. Census Bureau, as the poverty threshold for one person, or
• on a facts-found basis, and includes, but is not limited to, employment in a protected environment, such as a family business or sheltered workshop, when earned annual income exceeds the poverty threshold. 

• Marginal employment is, by definition, not substantially gainful employment. 
• Do not consider amounts received from participation in the Veterans Health Administration’s Compensated Work Therapy Program as income for IU purposes.  

• the U.S. Census Bureau’s poverty threshold, see http://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html, and
•  marginal employment in a protected environment, see M21-1, Part VIII, Subpart iv, 3.A.2.e.

VIII.iv.3.A.2.d.  Circumstances for Considering Marginal Employment

VIII.iv.3.A.2.e.  Definition:  Protected Environment

• if the Veteran is in receipt of an Americans with Disabilities (ADA) accommodation
• any individualized factor or evidence that tends to clarify whether a specific position was shielded in some respect from competition in the employment market, and
• that the income earned from employment in a protected environment must, while exceeding the poverty threshold, be relatively low because 38 CFR 4.16(a) designates earned annual income as the primary standard for determining whether employment is marginal.

• Consideration of employment in a protected environment is only triggered when a Veteran’s income exceeds the poverty level.
• Context is critical, and no single fact or factor should determine the decision.  Entitlement to protected-environment IU, like all other types of IU, ultimately depends on whether a Veteran’s SC disabilities render the Veteran incapable of performing the mental and physical acts required for substantially gainful employment.

• ADA accommodation is not by itself evidence that a Veteran is working in a protected environment, but a Veteran receiving accommodations beyond those legally required by the ADA may demonstrate that the Veteran is employed in a protected environment.
• The term lower-income position is not specifically defined, however, the extent to which a Veteran’s earned annual income exceeds the poverty threshold is clearly a key regulatory consideration.  As such, the Veteran’s income may be more than the poverty threshold, but less than substantially gainful.

• defining a protected environment, see Labruzza and McBride v. McDonough, 37 Vet.App. 111 (2024), and
• determining marginal employment, see M21-1, Part VIII, Subpart iv, 3.A.2.c and d.

VIII.iv.3.A.2.f.  Examples of Protected Environments

Introduction

• non-economic component of an IU determination
• vocational and educational history in IU determinations, and
• limitation of ability in IU determinations.

Change Date

VIII.iv.3.A.3.a.  Non-economic Component of an IU Determination

• vocational and educational history, as discussed in M21-1, Part VIII, Subpart iv, 3.A.3.b, and
• limitation of ability, as discussed in M21-1, Part VIII, Subpart iv, 3.A.3.c.

VIII.iv.3.A.3.b.  Vocational and Educational History in IU Determinations 

• employment history, such as
  • type of work
  • length of employment
  • skills required in this type of employment
  • time since last employed, and/or
  • intervening history of injuries since last employment
• education
  • level of educational achievement
  • nature of education (area of educational focus), and/or
  • applicability of past education in the current job market
• skill, such as
  • vocational skills acquired through past work, education, or training, and/or
  • recreational or other skills relevant to current or future employment, and
• training, such as
  • formal training courses or experiences, and/or
  • on-the-job training.

VIII.iv.3.A.3.c.  Limitation of Ability in IU Determinations 

• exertional, and/or
• non-exertional.

• sedentary
• light
• medium
• heavy, or
• very heavy.

• physical impairment for functions such as
  • lifting
  • bending
  • sitting
  • standing
  • walking
  • climbing
  • grasping
  • typing
  • reaching
  • seeing, and/or
  • hearing, and
• mental limitations concerning
  • memory
  • concentration, and/or
  • ability to
    • adapt to change
    • handle work-place stress
    • get along with co-workers, and/or
    • demonstrate reliability and productivity.

• completing a decision concerning entitlement to IU, see M21-1, Part VIII, Subpart iv, 3.C.3, and
• the factors that must be addressed in the rating decision, see M21-1, Part VIII, Subpart iv, 3.C.3.c.