Unemployability from Hill and Ponton

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Excerpt from Hill and Ponton’s What is Post Traumatic Stress Disorder (PTSD)

The goal for many veterans is to get to a 100 percent disability rating, but this is not always possible through the rating schedule due to an individual’s particular conditions. But, there is another way to be awarded a 100 percent rating: total disability based on individual unemployability (TDIU). Under 38 C.F.R. s. 4.16, a total disability rating may be assigned if a person who fails to meet the schedular rating is, nevertheless, unable to obtain and maintain a substantially gainful occupation. TDIU is not a separate claim for benefits, but is instead part of the rating process. During the VA benefits process, a veteran is assumed to be seeking the highest benefit allowable, so if facts exist in the record that indicate the veteran is unemployable, the VA is obligated to consider and adjudicate TDIU. Note that this does not always happen, so it is in the veteran’s best interest to begin the TDIU process by submitting VA Form 21-8940 or submitting an informal claim for TDIU in a signed and dated letter or Form 21-4138 (Statement in Support of Claim). If the veteran does the latter, the VA will ask the veteran to complete and submit VA Form 21-8940, which is the formal application for total disability based on individual unemployability. The fact that TDIU claims can be raised by the record, but the VA also requires the submission of Form 8940 complicates the process of determining the correct effective date for TDIU, which is discussed below.

TDIU is an individualized determination that is made in the context of an individual veteran’s capabilities, whether or not an average person would be able to secure substantially gainful employment under the same conditions. Also note that the availability of work in the national or local economy is irrelevant to the consideration of TDIU, and the VA may also not consider the veteran’s age or any non-service-connected disabilities. When making a determination of TDIU, the VA will consider factors such as the frequency and duration of periods of incapacity or time lost from work due to disability, the veteran’s employment history and current employment status, the veteran’s educational history, and the veteran’s annual income from employment, if any. Standing alone, the fact that a veteran may be young or highly educated, or may have been recently employed with a long work career, is not a sufficient justification for a denial of TDIU. The VA is obligated to consider the totality of the circumstances regarding the veteran’s service-connected disabilities and inability to secure and maintain substantially gainful employment, keeping in mind the benefit of the doubt doctrine. If the veteran is taking medication to treat the service-connected disability, the VA should also make an assessment of the effects or side effects of the medication on the veteran’s employability. In addition, if the VA is put on notice that a veteran is receiving Social Security Administration benefits, it is obligated to obtain any relevant records.
The VA should schedule a general medical exam if a veteran expressly asks for a TDIU evaluation or the issue of TDIU is raised in the record. During the exam, the examiner will be asked to provide an opinion as to whether or not it is at least as likely as not that the veteran’s service-connected disability or combined disabilities make him or her unable to secure and maintain substantially gainful employment. The examiner must describe the disabilities’ functional impairment and how that impairment affects both physical and sedentary employment. See Part Three for more C&P exam tips.

TDIU TWO-STEP ANALYSIS

There is a two-step analysis for determining whether a veteran qualifies for TDIU. First, the veteran’s service-connected disabilities must satisfy certain percentage rating requirements under the rating schedule. Second, the veteran must be unable to secure substantially gainful employment due to his or her service-connected disabilities.
For the first step of the analysis, the veteran must have one service-connected disability that is rated at 60 percent or higher, or a combined disability rating of 70 percent, with one of the service-connected disabilities rated at least 40 percent. Note that for the combined disability calculation, certain disabilities are rated together, for example, disabilities that stem from the same accident or that are all part of the same body system.
It is also theoretically possible for a veteran who does not meet either the 60 percent or 70/40 percent requirement to qualify for extraschedular TDIU, although this is a difficult hurdle. For some veterans, they may not meet the percentage requirements, but the nature of their service-connected disability is such that they are not able to secure substantially gainful employment. For example, a veteran may suffer from debilitating migraines, which only have a maximum disability rating of 50 percent, but because the veteran must call in sick to work regularly, he is unable to keep a job. This veteran may want to argue that he should be receiving TDIU on an extraschedular basis. His case will be referred by the regional office to the VA Central Office in Washington, DC, where it will be reviewed by the Director of Compensation and Pension. The referral by the regional office must include a full statement as to the veteran’s service-connected disabilities, employment history, educational and vocational attainment, and other factors bearing on the issue, which will usually take the regional office a long time to gather and send along.
The second element of proving TDIU is that the veteran is unable to maintain substantially gainful employment due to his or her service-connected disabilities. Again, note that non-service-connected disabilities are irrelevant in the determination of TDIU. It is important for the veteran to emphasize that it is his or her service-connected disabilities in particular which are causing his or her inability to maintain substantially gainful employment.
What is substantially gainful employment? In simplest terms, substantially gainful employment is employment that is not marginal. Marginal employment means that a person’s earned annual income is less than or equal to the poverty threshold for one person as established by the United States Department of Commerce, Bureau of the Census. Sometimes it is possible for a veteran to earn more than the poverty threshold and still qualify for TDIU. For example, if he or she works in a sheltered environment such as a family business or if he or she is provided accommodations or leniencies by his or her employer on account of service-connected disabilities, such as excessive time off or the ability to leave work at will, that may be considered a sheltered work environment. If a veteran is working, whether in a sheltered environment or in less than substantially gainful employment, the VA will evaluate whether the fact that the veteran is employed is proof of the fact that he or she has the ability to find and secure substantially gainful employment. Therefore, it is important to make clear that while the veteran may be currently employed, he or she does not have the ability to perform work with reasonable consistency and for a reasonable time due to his or her service-connected disabilities. The best evidence for a TDIU determination is a professional opinion from a vocational expert or competent medical doctor stating the due to his or her service-connected disabilities, the veteran is unable to secure substantially gainful employment.

EFFECTIVE DATE

Perhaps the most complicated issue relating to TDIU is the effective date. Because TDIU is not a separate claim, but part of the rating process, it can be difficult to figure out when the award of TDIU should begin, and this is often something that the VA gets wrong. In simplest terms, to determine the effective date for TDIU you must first figure out the date on which the VA first received evidence from some source which indicates that the veteran was unemployable. This could be a letter from a doctor or a notation in medical records which states that the veteran is unable to work due to his or her service-connected disability. Second, you must determine the status of the veteran’s disabilities at the time the VA received this evidence.
There are three main ways to answer the second question. The first possibility is that the VA first received evidence of the veteran’s unemployability when he or she filed a claim for service-connection or when the VA was considering whether to grant service connection. If the VA eventually grants service-connection for the veteran’s disability and awards TDIU, the effective date for the TDIU would be the date the VA received the claim for service connection or the date the veteran first became unemployable due to his or her service-connected disabilities, whichever is later.
If the VA first received evidence of the veteran’s unemployability after the VA granted service connection, but before the VA made a final decision on the rating for the disability, the effective date for an award of TDIU would be the date the VA received the claim for service connection or the date the veteran first became unemployable due to his or her service-connected disabilities, whichever is later.
And finally, if the VA first received evidence of the veteran’s unemployability when he or she filed a claim for an increased disability rating or while a claim for an increased disability rating is pending, the effective date for an award of TDIU would be the date the VA received the claim for an increase in disability rating or the date the veteran first became unemployable due to his or her service-connected disability ratings, whichever is later.
As you can see, this can be a tricky determination to make, so it is always important to analyze the effective date set by the VA to see whether they got it right.

AFTER A TDIU DECISION

If TDIU is denied or the wrong effective date is assigned, the veteran can appeal the decision in the same manner as any other rating decision by filing a Notice of Disagreement (NOD) within one year of the date on the letter that accompanied the TDIU decision. If the veteran fails to file a NOD within one year, the decision becomes final and can only be reopened by submitting new and material evidence or by demonstrating that the decision was the product of clear and unmistakable error.
When a veteran is awarded a total disability rating based on TDIU, the VA may not reduce the benefits unless there is clear and convincing evidence that establishes that the veteran is capable of actual employability. This is a high burden for the VA to meet. Even if a veteran’s disability has materially improved, if the VA cannot prove by clear and convincing evidence that he or she is able to engage in substantially gainful employment, TDIU must be preserved. In addition, if a veteran’s disabilities improve and he or she decides to return to work, his or her TDIU benefits will continue for a year until they are terminated.
Before the VA reduces a disability rating, including TDIU, it must provide a notice of proposed reduction and give the veteran 60 days to submit evidence to show that his or her condition has not improved. The veteran also has the opportunity to request a hearing. It is also likely that the VA will request that the veteran report for a re-examination. An examination that is the basis for a reduction must be even more thorough than the examination that established the current rating or TDIU (see Part Three). The VA must review all the new evidence, including the re-examination report, in the context of all of the evidence in the record in order to reach a new decision on TDIU.

Can I work and receive TDIU? Yes, in some cases you can.

I can’t work if I’m getting Unemployability, right? No, in fact, unemployability does not always mean that a veteran is not working. The key, however, is that all income earned from employment must be at or below the poverty level, or from a job that is considered to be “sheltered”. These types of marginal employment are not considered as substantially gainful occupation.

Marginal employment is considered as “earned annual income that does not exceed the poverty threshold for one person as established by the US Department of Commerce, Bureau of the Census.” For 2016, the poverty level for which a veteran must be working under was $11,880.
IU Poverty Levels
Alternatively, a job in a “sheltered environment” (such as a family business, sheltered workshop, or a position tailored to the specific needs of the veteran) is considered to be marginal employment, even if that job earns an income over the current poverty threshold. Sheltered employment means that you are given concessions due to your service connected disabilities that would not normally be given to other employees. For example: a veteran with PTSD works for a family friend’s business. The family friend provides the veteran with an office and duties that afford limited interaction with other people. The veteran’s salary pays his bills, and is over the current poverty threshold. Because the veteran’s job has been tailored to his individual needs (limited interaction with other people), his job is considered to be sheltered, and therefore falls under “marginal employment.” The VA cannot consider this job as being substantially gainful employment, and must not use it against him in determining IU.

One thing that the VA often overlooks is the requirement that a veteran be able to maintain substantially gainful employment. For instance, a veteran may be able to hold a job for a few months, but then loses the job due to his service connected disabilities. He then may be able to get another job for a few months, before losing that one, and the cycle repeats. In such a case, the veteran is able to get jobs, but he is not maintaining employment, and is eligible for IU.
So, what does this mean on a practical level? First, it means that VA law does allow for some veterans who work to also receive IU benefits at the same time, depending on the circumstances. Second, it means that disabled veterans who are working should not automatically assume that they are not eligible for IU simply because they work.
Can a Veteran Earn an Income while Receiving VA TDIU Benefits?
To answer this question, we need only look to the law.

For those of you that don’t know what TDIU is, I encourage you to read this post to get a basic understanding of the 2 types of TDIU Benefits.

To those of you trying to win your VA TDIU Claim, I encourage you to consider whether a copy of the VA TDIU Field Manual, or the VA TDIU eBook Package – will help you understand and improve your VA TDIU Claims.

38 C.F.R. §4.16(a) – the section of the Code of Federal Regulations that states the requirements for eligibility for TDIU Benefits, states the following:

Total disability ratings for compensation may be assigned, where the schedular rating is less than total, when the disabled person is, in the judgment of the rating agency, unable to secure or follow a substantially gainful occupation as a result of service-connected disabilities

Now, as I’ve discussed before on the Veterans Law Blog, the law does not clearly define what substantially gainful occupation is.
But the law DOES define what Substantially Gainful employment IS NOT.
Read the rest of 38 C.F.R. §4.16(a):

Marginal employment shall NOT be considered substantially gainful employment. For purposes of this section, marginal employment generally shall be deemed to exist when a veteran’s earned annual 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.
Marginal employment may also be held to exist, on a facts found basis (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. (emphasis is mine).

So there you have it – the 2 ways that Veteran can earn an income while receiving VA TDIU benefits: when the employment is “marginal” and when the employment is “sheltered”.
We’ll look at them in more detail, below.
You might ask “Why” a Veteran is allowed to earn an income in these 2 scenarios while receiving TDIU Benefits.
Truth be told, I have no clue why Congress wrote the laws this way when they wrote them – someday I’ll dig into the legislative history to understand it.
But since Congress allowed it, there is NOTHING wrong with Veterans getting Marginal or Sheltered Employment income while receiving TDIU Benefits.
Marginal Employment & TDIU Benefits.
This is the type of income that many Veterans are aware that they can receive even after being granted TDIU Benefits.
Simply go to the US Bureau of Census website, and look up the “poverty threshold for one person”.  (Click here to see the historical poverty ratings tables from 1959 – 2015).
You will see that, for 2014, the poverty threshold for one person is  $12,316 per year (if you are under 65), or $11,354 (if you are over 65).
Each year, the VA will ask you to verify your employment (or lack thereof) to determine whether you are eligible to continue to receive TDIU Benefits. They typically require that you use VA Form 21-4140 or 21-4140-1 to do this report.

The VA does cross check 2 databases that I know of:  Social Security databases that record your work/income history, and IRS databases that record your family income on your annual tax returns.  Word to the wise: if you are telling different income stories to different federal agencies, you are playing with fire, and may even be committing fraud.

If you indicate in this form that your income is higher than the poverty threshold, a proposal to reduce your TDIU benefits will be forthcoming.
It’s one of the few times that the VA acts with a sense of purpose – when they want to STOP paying you.
Sheltered Employment & TDIU Benefits
Another way that Veterans can earn an income while receiving TDIU Benefits is by participating in what is called “sheltered employment”.
There are many ways that your income can be considered “sheltered”, but 2 that are clearly identified in the regulation itself:

1) Family business

2) Sheltered Workshop (these are supervised workplaces for adults with a physical and/or mental handicap)

Now, just because you are working for a family business doesn’t mean your job is considered “sheltered employment”.  It has to be what the regulation refers to as a “protected environment”.
A protected environment occurs when the employer makes special accommodations to employ and provide an income for a family member or a disabled worker. This happens quite a lot  – a family business, to reduce its tax burden or simply to help another family member, pays a disabled Veteran family member an income that they would not otherwise be able to receive.
How can you tell if there is a protected work environment?
What kind of questions would you ask, and what kind of evidence would you need?
If you can get answers to these kinds of questions – typically in an affidavit by the business owner or the executive in charge of hiring/staffing – you will have a much stronger proof of entitlement to TDIU benefits even while earning an income well above the poverty threshold in a sheltered employment situation.
1) Did they employer provide any special accommodations (especially if they are not required to by the Americans With Disabilities Act) to accommodate the employee with disabilities?  These accommodations are most commonly adjustments to the work schedule, the work environment, or the work duties.

I have not handled a case yet where a major employer, covered by the Americans With Disabilities Act, provides an accommodation to a 100% disabled Veteran as required by law to do. This is an interesting question as to whether or not the employment could be considered sheltered when the company has a legal obligation to enact accommodations.  I am not aware of any VA precedent on this topic – if you do know of a precedential case on this topic, don’t hesitate to let me know!

2) If the employee leaves the company, will the business hire a “similarly situated” person to fill the position (i.e, another worker with a disability)?
There are 3 scenarios here:

Scenario #1:  If the business plans to modify the Veteran’s position after he or she leaves so that there are no longer accommodations to the work duties, environment or schedule, then you can make a pretty good argument that the employment is sheltered.  Why? Because it appears that the position may have been created or modified just for the disabled Veteran.

Scenario #2: If the business plans on continuing the accommodation, then its a pretty good argument that the position itself – and anyone that holds it – is sheltered employment.  (Many employers do this for the tax advantages available to certain types of “sheltered workshops”).

Scenario #3: If the business plans to eliminate the position after the disabled Veteran leaves the job, then it is most likely “sheltered employment”.

None of the above scenarios are absolute: the more evidence you can show that an employer created a job for a 100% disabled Veteran – whether for “feel-good” reasons, tax incentives, or any other reason other than common business reasons, the stronger your case of showing that your position is “sheltered employment”.
3) Is there evidence that another business in the same industry would NOT hire a similarly situated employee, and pay them a similar income, for the same type of work?
What do I mean here?
If your family business pays you $50,000 a year, while allowing you to come in to the job  “only on the days you feel up to it”, look to other businesses in the same  industry to see if they would pay that same salary to an employee that comes and goes at will.
Where do you get evidence of this sort of thing?
Honestly, you would hire an economist to prepare an expert report on the nature of the employment and whether or not it is sheltered, based on a survey of the particular industry.
This type of expert report can get really expensive, so I would not typically do this unless it was really questionable whether the employment was sheltered or not, and there was a lot riding on the outcome.
Frankly, providing evidence that answers Question #3 is probably a bit “over the top” in most Sheltered Employment claims.
Legal Advice in Sheltered Employment situations.
Be VERY careful with the Sheltered Employment rules.
They are not frequently applied, many in the VA do NOT know about them (or don’t understand them when they do know about them), and the Sheltered Employment Rules can lead to serious consequences if applied incorrectly.
I’m not telling any details here, but I know of a couple Veterans who have been charged with criminal fraud for collecting TDIU benefits while getting an income and doing nominal work for a family member’s business.
These charges usually will not stick – as the US Attorneys that prosecute these crimes have far less understanding of VA regulations than even most VA raters or Board Hearing Officials.
But you’re going to have to pay a criminal defense attorney to make it go away, and the VA ain’t repaying your attorneys fees.
That said, it is ALWAYS BEST  to get legal advice – call a VA Accredited attorney and ask for a consultation –  if you are considering earning income above the poverty threshold and want to know if it is or is not considered “sheltered employment”.

Can a 100 percent Disabled Veteran Work and Earn an Income?

You’ve just been rated 100% disabled by the VA. After the excitement of finally having the rating you deserve wears off, you start asking questions. One of the first questions you might ask is this: It’s a legitimate question – rare is the Veteran that finds themselves sitting on the couch eating bon-bons after being rated 100% disabled.

Some Veterans like to work to have something to do. Other Veterans like to work for non-profits or other organizations that provide a public service …. after all, Veterans as a community are more heavily oriented to public service than many other groups of people. Yet other Veterans still like to keep doing their job, as they find that the income from even a 100% VA disability rating is not enough to cover all their expenses.

Whether the family’s bills, funding college educations for kids and grand-kids, medical bills for spouses and children, or paying off the mountains of debt that have likely built up in the 5-10 years, you have probably been waiting for the Veterans Affairs to get off its arse and make the right decision….100% disability rating is barely enough money to live off.

So, here’s the answer…and it’s a lawyer’s FAVORITE answer…It Depends. Whether a 100 percent Disabled Veteran can work turns on the answer to this question: Are you getting a 100% schedular rating or 100% unemployability (aka, TDIU or IUIU)?

Veterans that Receive 100% Schedular Ratings have NO Limitations on Their Ability to Work.

Veterans are rated for their Veterans Affairs Disability based on a set of tables known as the VA Impairment Rating Tables. These are also known as the “Schedule of Ratings.” So, suppose your 100% VA Disability Rating comes because you qualify for the 100% rating specified for a single (or combination of multiple) service-connected conditions using the Schedule of Ratings. In that case, you have NO limitations on your ability to work.

Some Veterans think that this doesn’t make sense: after all, if you are 100% disabled, that means you can’t do anything, right? This is one of the problems with the VA Disability Compensation system – for years, we have been led to believe that the percentage of rating equates to a percentage of how much our body is disabled.

In reality, the percentage of your disability rating means that you have had that percentage of interference with your ability to earn an income.

So a Veteran whose service-connected condition equates to a 100% disability rating is not – in the eyes of the law – 100% disabled. Instead, in the eyes of the law, the Veteran’s ability to earn an income has been 100% interfered with.

Bottom line, if you are rated 100% using the Schedule of Ratings or the Impairment Rating Table
 – whether for one condition or multiple conditions – you can work as much or as little as you want.

Theoretically, you could make $1,000,000 a minute and still collect a 100% VA Disability Schedular Rating. Of course, to make that kind of money, you’d probably have to become a Congressional representative and put your hand into the pocket of some pretty unseemly political and lobbying organizations.

But the point is the same: Veterans that Receive 100% Schedular Ratings have NO Limitations on Their Ability to Work or earn an income.

Can a Veteran Earn an Income while Receiving VA TDIU Benefits?

To answer this question, we need only look to the law.

38 CFRCFR §4.16(a) – the section of the Code of Federal Regulations that states the requirements for eligibility for TDIU Benefits says the following:
Total disability ratings for compensation may be assigned, where the schedular rating is less than total, when the disabled person is, in the rating agency’s judgment, unable to secure or follow a substantially gainful occupation as a result of service-connected disabilities.

As I’ve discussed before on the Veterans Law Blog, the law does not clearly define what substantially gainful occupation is. But the law DOES define what Substantially Gainful employment IS NOT.

Read the rest of 38 CFRCFR §4.16(a):
38 CFRCFR §4.16(a) – Marginal employment shall NOT be considered substantially gainful employment. For purposes of this section, marginal employment generally shall be deemed to exist when a veteran’s earned annual income does not exceed the amount established by the US Department of Commerce, Bureau of the Census, as the poverty threshold for one person. Marginal employment may also be held to exist on facts found basis (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. (emphasis is mine).

So there you have it – the two ways veterans can earn an income while receiving VA TDIU benefits: when the employment is “marginal” and when the employment is “sheltered.”

We’ll look at them in more detail below.

You might ask “Why” a Veteran is allowed to earn an income in these two scenarios while receiving TDIU Benefits.

Truth be told, I have no clue why Congress wrote the laws this way when they wrote them – someday, I’ll dig into the legislative history to understand it.

But since Congress allowed it, there is NOTHING wrong with Veterans getting Marginal or Sheltered Employment income while receiving TDIU Benefits.

#1: Marginal Employment and TDIU Benefits.

Many Veterans know that they can receive this type of income even after being granted TDIU Benefits.

Go to the US Bureau of Census website, and look up the “poverty threshold for one person.” (Click here to see the historical poverty rating tables from 1959 – 2015).

You will see that, for 2014, the poverty threshold for one person is $12,316 per year (if you are under 65) or $11,354 (if you are over 65). 

Each year, the VA will ask you to verify your employment (or lack thereof) to determine whether you are eligible to continue to receive TDIU Benefits. They typically require that you use VA Form 21-4140 or 21-4140-1 to do this report.

The VA does cross-check two databases that I know of Social Security databases that record your work/income history and IRSIRS databases that record your family income on your annual tax returns. Word to the wise: if you are telling different income stories to different federal agencies, you are playing with fire and may even be committing fraud.

If you indicate in this form that your income is higher than the poverty threshold, a proposal to reduce your TDIU benefits will be forthcoming.

It’s one of the few times the VA acts with a sense of purpose – when they want to STOP paying you.

#2: Sheltered Employment & TDIU Benefits

Another way veterans can earn an income while receiving TDIU Benefits is by participating in “sheltered employment.”

VA Disability: Forum Chat Message Discuss Talk

There are many ways that your income can be considered “sheltered,” but two that are clearly identified in the regulation itself:

  1. Family business
  2. Sheltered workshops (these are supervised workplaces for adults with a physical and/or mental handicap)

Now, just because you are working for a family business doesn’t mean your job is considered “sheltered employment.” It has to be what the regulation refers to as a “protected environment.”

A protected environment occurs when the employer makes special accommodations to employ and provide an income for a family member or a disabled worker. This happens quite a lot – a family business, to reduce its tax burden or simply to help another family member, pays a disabled Veteran family member an income they would not otherwise be able to receive.

How can you tell if there is a protected work environment?

What kind of questions would you ask, and what type of evidence would you need?

If you can get answers to these kinds of questions – typically in an affidavit by the business owner or the executive in charge of hiring/staffing – you will have a much stronger proof of entitlement to TDIU benefits even while earning an income well above the poverty threshold in a sheltered employment situation.

  1. Did the employer provide any special accommodations (especially if the Americans With Disabilities Act does not require them) to accommodate the employee with disabilities? These accommodations are most commonly adjustments to the work schedule, the work environment, or the work duties. I have not handled a case yet where a major employer, covered by the Americans With Disabilities Act, provides an accommodation to a 100% disabled Veteran as required by law. This is an interesting question as to whether or not the employment could be considered sheltered when the company has a legal obligation to enact accommodations. I am not aware of any VA precedent on this topic – if you know of a precedential case on this topic, don’t hesitate to let me know!
  2. If the employee leaves the company, will the business hire a “similarly situated” person to fill the position (i.e., another worker with a disability)?
    1. There are three scenarios here:
      • Scenario #1:  If the business plans to modify the Veteran’s position after they leave so that there are no longer accommodations to the work duties, environment or schedule, then you can make a pretty good argument that the employment is sheltered. Why? Because it appears that the position may have been created or modified just for the disabled Veteran.
      • Scenario #2: If the business plans on continuing the accommodation, then it’s a pretty good argument that the position itself – and anyone that holds it – is sheltered employment. (Many employers do this for the tax advantages available to certain types of “sheltered workshops”).
      • Scenario #3: If the business plans to eliminate the position after the disabled Veteran leaves the job, then it is most likely “sheltered employment.”
    1. None of the above scenarios are absolute: the more evidence you can show that an employer created a job for a 100% disabled Veteran – whether for “feel-good” reasons, tax incentives, or any other reason other than common business reasons, the stronger your case of showing that your position is “sheltered employment.”

Is there evidence that another business in the same industry would NOT hire a similarly situated employee and pay them a similar income for the same type of work?

What do I mean here?

If your family business pays you $50,000 a year while allowing you to come into the job “only on the days you feel up to it,” look to other businesses in the same industry to see if they would pay that same salary to an employee that comes and goes at will.

Where do you get evidence of this sort of thing?

Honestly, you would hire an economist to prepare an expert report on the nature of the employment and whether or not it is sheltered, based on a survey of the particular industry.

This type of expert report can get really expensive, so I would not typically do this unless it was really questionable whether the employment was sheltered or not, and there was a lot riding on the outcome.

Frankly, providing evidence that answers Question #3 is probably a bit “over the top” in most Sheltered Employment claims.

Legal Advice in Sheltered Employment situations.

Be very careful with the Sheltered Employment rules.

They are not frequently applied, many in the VA do NOT know about them (or don’t understand them when they do know about them), and the Sheltered Employment Rules can lead to severe consequences if applied incorrectly.

I’m not telling you any details here, but I know of a couple of Veterans who have been charged with criminal fraud for collecting TDIU benefits while getting an income and doing nominal work for a family member’s business.

These charges usually will not stick – the US Attorneys that prosecute these crimes have far less understanding of VA regulations than most VA raters or Board Hearing Officials.

But you’ll have to pay a criminal defense attorney to make it disappear, and the VA isn’t repaying your attorney’s fees.

That said, it is ALWAYS BEST to get legal advice – call a VA Accredited attorney and ask for a consultation – if you are considering earning income above the poverty threshold and want to know if it is or is not; considered “sheltered employment.A