[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
DOES A TOTAL DISABILITY RATING BASED
ON INDIVIDUAL UNEMPLOYABILITY (TDIU)
PROPERLY COMPENSATE TODAY'S
VETERANS?
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON DISABILITY
ASSISTANCE AND MEMORIAL AFFAIRS
OF THE
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
WEDNESDAY, JUNE 12, 2024
__________
Serial No. 118-67
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via http://govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-197 WASHINGTON : 2025
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COMMITTEE ON VETERANS' AFFAIRS
MIKE BOST, Illinois, Chairman
AUMUA AMATA COLEMAN RADEWAGEN, MARK TAKANO, California, Ranking
American Samoa, Vice-Chairwoman Member
JACK BERGMAN, Michigan JULIA BROWNLEY, California
NANCY MACE, South Carolina MIKE LEVIN, California
MATTHEW M. ROSENDALE, SR., Montana CHRIS PAPPAS, New Hampshire
MARIANNETTE MILLER-MEEKS, Iowa FRANK J. MRVAN, Indiana
GREGORY F. MURPHY, North Carolina SHEILA CHERFILUS-MCCORMICK,
C. SCOTT FRANKLIN, Florida Florida
DERRICK VAN ORDEN, Wisconsin CHRISTOPHER R. DELUZIO,
MORGAN LUTTRELL, Texas Pennsylvania
JUAN CISCOMANI, Arizona MORGAN MCGARVEY, Kentucky
ELIJAH CRANE, Arizona DELIA C. RAMIREZ, Illinois
KEITH SELF, Texas GREG LANDSMAN, Ohio
JENNIFER A. KIGGANS, Virginia NIKKI BUDZINSKI, Illinois
Jon Clark, Staff Director
Matt Reel, Democratic Staff Director
SUBCOMMITTEE ON DISABILITY ASSISTANCE AND MEMORIAL AFFAIRS
MORGAN LUTTRELL, Texas, Chairman
C. SCOTT FRANKLIN, Florida CHRIS PAPPAS, New Hampshire,
JUAN CISCOMANI, Arizona Ranking Member
ELIJAH CRANE, Arizona CHRISTOPHER R. DELUZIO,
KEITH SELF, Texas Pennsylvania
MORGAN MCGARVEY, Kentucky
DELIA C. RAMIREZ, Illinois
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
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WEDNESDAY, JUNE 12, 2024
Page
OPENING STATEMENTS
The Honorable Morgan Luttrell, Chairman.......................... 1
The Honorable Chris Pappas, Ranking Member....................... 2
WITNESSES
Panel I
Mr. Ronald S. Burke Jr., Deputy Under Secretary, Office of Policy
& Oversight, Veterans Benefits Administration, U.S. Department
of Veterans Affairs............................................ 3
Accompanied by:
Mr. Nick Pamperin, Executive Director, Veterans Readiness and
Employment Service, U.S. Department of Veterans Affairs
Mr. David J. Barrans, Chief Counsel, Benefits Law Group,
Office of General Counsel, U.S. Department of Veterans
Affairs
Panel II
Mr. Marquis Barefield, Assistant National Legislative Director,
Disabled American Veterans (DAV)............................... 9
Mr. Michael S. Figlioli, Director, National Veterans Service,
Veterans of Foreign Wars of the United States (VFW)............ 10
Mr. Mike Stoddard, National Service Director, Benefits Service,
Wounded Warrior Project (WWP).................................. 12
APPENDIX
Prepared Statements Of Witnesses
Mr. Ronald S. Burke Jr. Prepared Statement....................... 21
Mr. Marquis Barefield Prepared Statement......................... 26
Mr. Michael S. Figlioli Prepared Statement....................... 31
Mr. Mike Stoddard Prepared Statement............................. 33
Statements For The Record
National Organization of Veterans' Advocates, Inc. Prepared
Statement...................................................... 39
Paralyzed Veterans of America Prepared Statement................. 45
James Vollman Prepared Statement................................. 50
Georgetown University Center on Education and the Workforce
Prepared Statement............................................. 54
DOES A TOTAL DISABILITY RATING BASED
ON INDIVIDUAL UNEMPLOYABILITY (TDIU)
PROPERLY COMPENSATE TODAY'S VETERANS?
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WEDNESDAY, JUNE 12, 2024
Subcommittee on Disability Assistance &
Memorial Affairs,
Committee on Veterans' Affairs,
U.S. House of Representatives,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:15 a.m., in
room 360, Cannon House Office Building, Hon. Morgan Luttrell
(chairman of the subcommittee) presiding.
Present: Representatives Luttrell, Self, Pappas, and
McGarvey.
OPENING STATEMENT OF MORGAN LUTTRELL, CHAIRMAN
Mr. Luttrell. Subcommittee will come to order. Thank you
for the witnesses for being here with us today. We are going to
take a close look at the Veterans Disability Benefit program,
known as a Total Disability rating based on Individual
Unemployment, or TDIU. We will examine whether the disability
benefit properly compensates our veterans today. TDIU is a tax-
free monthly benefit that U.S. Department of Veterans Affairs
(VA) awards to veterans who are unable to work due to their
service connected disabilities. Eligible veterans can
potentially receive both TDIU and VA occupational
rehabilitation benefits.
TDIU is established in the 1930's, and the requirements to
be eligible for TDIU essentially have not changed since 1940's,
so that is over 80 years. TDIU is meant to make veterans whole
for their total loss of income resulting from their service-
related disabilities. We must ensure that TDIU is properly and
adequately supporting the men and women who have earned it and
their families.
Under current law, VA takes into account a veteran's
education and work history to decide whether a veteran is
eligible for TDIU, but the benefit itself is flat rate of
roughly $3,800, regardless of a veteran's education, or work
history, and/or career growth potential.
Further, a veteran may be eligible for TDIU if they are
only able to maintain marginal employment. VA states that
marginal employment is employment that pays below the poverty,
according to the us census, which is roughly $15,000. Even when
a veterans income is higher than the poverty level, VA will
still consider their job marginal employment if it is
employment in a protected environment, which can include a
family business and or sheltered workshop.
For decades, VA has refused to define exactly what
employment in a protected environment means. Recently, the U.S.
Court of Appeals for Veterans Claims attempted to define it as
a lower income position that is shielded in some respect from
competition in the employment market. We know it is still
unclear to the veterans about what counts as employment in a
protected environment.
We also heard from civilian workforce experts that the
current flat rate of TDIU is outdated. However, these
occupational experts emphasize that VA must conduct further
studies and obtain data to ensure that Congress is fully
informed if we are to change the TDIU eligibility criteria and
rates to properly make veterans whole. Similarly, the Federal
Advisory Committee on Disability Compensation (ACDC)
recommended that VA study the use of aids to determine
vocational assessments in TDIU.
VA conducted the study, but the VA has not shared the study
results with Congress, despite our frequent asks from the
committee staff. In 2023, nearly 300,000 veterans receiving
TDIU. We must ensure that TDIU benefits works for today's
veterans and their families. That includes ensuring that we
have all the data and information we need to determine whether
TDIU eligibility criteria and benefits amount should be
modernized.
With that, I yield to the ranking member.
OPENING STATEMENT OF CHRIS PAPPAS, RANKING MEMBER
Mr. Pappas. Thank you, Mr. Chairman. As we examine the TDIU
program today, I think it is important to remember that behind
all the numbers we will hear discussed today are real life
people, veterans who have served and sacrificed and have been
markedly changed as a result of that service, both physically
and mentally. Those veterans deserve not only our gratitude,
but our attention and respect. Those veterans also deserve our
understanding, our understanding that they are indeed
individuals, and that their abilities and disabilities are
unique to them in many ways.
While it is known that VA disability rating schedule is
rather rigid, the VA math used to combine multiple disability
ratings is not straightforward arithmetic. The total disability
based on Individual Unemployability benefit is an attempt to
inject some nuance and understanding into the system.
Two veterans may experience the same disability
differently, or a unique combination of disabilities may render
one veteran unable to work, while others may still be able to
find gainful employment. Therefore, TDIU exists to accommodate
the unique circumstances of an individual veteran when their
disability or combination of disabilities may not add up to 100
percent, and yet they are unable to find sustainably gainful
employment. It is a benefit that must remain available both for
current and future veterans. No program is without room for
improvement. TDIU is no exception to that.
However, we must tread carefully in discussing any changes
to this program. Certainly, we should create pathways to work
for veterans, TDIU or not, who may want to enter the workforce.
However, we must not make receipt of one benefit contingent
upon use of another, and we must recognize that cessation of a
benefit could represent a significant financial hardship to a
veteran.
Mr. Chairman, thank you for holding this hearing. I look
forward to the testimony of our witnesses and discussing ways
we can improve benefits for our veterans. I yield back.
Mr. Luttrell. Thank you, Mr. Pappas. Our lead witness from
VA is Mr. Ron Burke. Good to see you again, sir. Deputy Under
Secretary of the Office of Policy and Oversight in the Veterans
Benefit Administration. Mr. Burke is joined by Mr. Nick
Pamperin, Executive Director of the Veteran Readiness and
Employment (VR&E) Service, and Mr. David Barnes, Barrans,
excuse me, Chief Counsel of the Benefits Law Group, Office of
General Counsel.
Thank you. Let the record reflect that the witnesses have
answered in the affirmative. Thank you all for being here
today.
[Witness sworn.]
Mr. Luttrell. Mr. Burke, you are now recognized for 5
minutes, sir, to deliver your opening statement.
STATEMENT OF RONALD BURKE
Mr. Burke. Thank you. Chairman Luttrell, Ranking Member
Pappas, and members of the subcommittee, thank you for inviting
us here today to discuss the Department of Veterans Affairs
Individual Unemployability benefit. With me today are Nick
Pamperin, the Executive Director of Veteran Readiness and
Employment Service in the Veterans Benefits Administration, and
Dave Barrans, Chief Counsel, VA Office of General Counsel. The
Individual Unemployability (IU) benefit fills a critical gap
when the VA schedule for rating disabilities does not fully
address the impact of service-connected disability in a
veteran's circumstances. The intent of the Veterans Affairs
Schedule for Rating Disabilities (VASRD) is to fairly
compensate veterans for their disabilities according to the
average impairment to their earning capacity. However, the
VASRD cannot always adequately compensate an individual veteran
in their specific circumstance.
IU is, therefore, an important benefit that enables VA to
address these situations. For example, in cases where there is
sufficient evidence that a veteran is unable to obtain or
maintain gainful employment, but their specific impairment does
not meet the disability rating criteria for a scheduled 100
percent evaluation, VA may be able to bridge the gap by
utilizing the IU benefit to compensate the veteran at the 100
percent evaluation rate.
In Fiscal Year 2023, VA provided IU benefits to over
377,000 beneficiaries and saw an increase of such benefits of
21.7 percent over the past 10 years. The IU benefit has a long
history and regulation. In 1925, the VASRD provided the first
definition of total disability. In the following decades, the
regulation regarding IU have been updated numerous times to
clarify eligibility requirements.
Over the last several years, VA has taken steps to review
and scrutinize the IU program through various studies, court
decisions, and reports. Recent court decisions have identified
that VA's regulatory definitions of marginal employment and
protected environment lack specificity.
However, in January 2024, the Court of Appeals for Veterans
Claims issued a decision which concluded that VA's definition
of employment in a protected environment means a lower-income
position that, due to the veteran, service-connected disability
or disabilities, is shielded in some respect from competition
in the employment market. As a result of this decision, VA is
currently drafting guidance for claims processors and is also
considering whether regulatory updates may be needed.
Aside from our response to court decisions, VA is also
taking action to make sure that veterans are probably properly
compensated for their disabilities by examining and revamping
the VASRD. On February 12, or February 15, rather, 2022, VA
published a proposed rule in the Federal Register to amend the
portion of the VASRD for evaluation of mental disorders. If
finalized, the proposed change would help alleviate current
disparities with the evaluation of mental disabilities so that
veterans with such challenges may receive adequate compensation
using VASRD criteria rather than receiving Individual
Unemployability.
While IU is a great benefit aimed at compensating those who
cannot maintain gainful employment, it is important to note
that VA is also committed to other routes for veterans to find
gainful employment. One of these routes is VA's Veteran
Readiness and Employment program. The mission of the VR&E
program is to assist qualified service members and veterans
with service-connected disabilities prepare for, obtain, and
maintain suitable employment, or maintain a life of
independence.
One of VR&E Service's is the Chapter 31 program, and during
the past 5 years, VA received nearly 3,000 applications for
VR&E benefits for veterans in receipt of IU, of which 98
percent were found entitled to Chapter 31 benefits. VR&E
service has seen an average of 549 IU applicants per year for
Chapter 31 benefits.
Since 2020, VA has witnessed the successful rehabilitation
of 70 veterans in receipt of IU. Although the VR&E program has
been successful in preparing many veterans for suitable
employment, VA acknowledges that there may be, inevitably, some
veterans who are unable to obtain or maintain gainful
employment or whose specific impairment does not meet the
disability rating criteria for a scheduler 100 percent
evaluation. As such, VA remains committed to providing the IU
benefit to fill that critical gap.
Mr. Chairman, this concludes my statement. My colleagues
and I are prepared to respond to any questions you or other
members of the committee may have.
[The Prepared Statement Of Ronald Burke Appears In The
Appendix]
Mr. Luttrell. The record statement of Mr. Burke will be
entered into the hearing record. We will now move to
questioning. I recognize myself for 5 minutes. Give me just a
second. I am going to go ahead and engage with that one
question while it is fresh. In 2024, in January 2024, you said
the board came out with a finding on what the pay gap
requirements, I believe, is how we said.
Can you elaborate on that for me? It seems like the catch
point for TDIU or IU is that the poverty line is set in a
certain spot. If we are looking at this nationally, we fall in
different areas of the country. It is going to be different for
different people. What was the--can you get into the granular
level and the 5 minutes that I have of the findings of that
court, of that find, the details? Excuse me.
Mr. Burke. Yes, sir. I think the court finding that I
referenced really talked about protected environments, and that
really helped to call out, not necessarily the question that
you are referring to. I think there are multiple layers of what
we are trying to address in the IU space. The largest is the
VASRD changes that would actually more adequately compensate
folks with mental disorders compared to the current rating
schedule. In doing so, that may alleviate the need for
Individual Unemployability. As we feel there are gaps in the
way the VASRD is written today.
Mr. Luttrell. The protected environment, is there a--can
you explain the range for me?
Mr. Burke. Yes. The protected environment, actually, this
was a court case in 2024 where the court held that employment
in a protected environment is unambiguous and means that a
lower-income position that, due to the veteran service-
connected disability or disabilities, is shielded in some
respect from competition in the employment market. What we see
with those, largely, are those, I think that, you know, the
sheltered programs, the court case did not have anything to do,
necessarily, with the levels of compensation. It really honed
in on the definition of protected environment, so I am not
sure----
Mr. Luttrell. I think clarity is kind of the problem that
the veterans are running into, exactly what protected
environment looks like.
Mr. Burke. Yes, I think with respect to the protected
environment, there were a few things that came from the court
case. Determining employment in a protected environment is fact
specific. The court listed as common characteristics of
protected environment that employment sheltered from the open
labor market.
Mr. Luttrell. Is the term protected environment? It does
not seem like it gets into details of what exactly a protected
environment is. I think that the veterans are kind of
navigating themselves in and around it, and some have kind of
got it on the chin and then some have not.
Mr. Burke. Well, and, sir, to your point, I think not just
veterans, but even our claims processors, which is why we are
in the process of developing guidance for our claims
processors, providing those tighter definitions. And----
Mr. Luttrell. Okay, so great point, sir, because we have
been, from what I understand, we have been trying to get that
clarified for the--since 2016, correct?
Mr. Burke. Well, we are actually taking the results of the
court case from 2024, which actually gave a little bit of room
for us to navigate within. We are actually using that recent
court finding to draw down and be more specific with the
guidance and the clarification. Again, not just for claims
processors, but to communicate that through our stakeholders,
our Veterans Service Organizations (VSO), our veteran
communities, there will be----
Mr. Luttrell. Do we have a----
Mr. Burke [continuing]. better understanding.
Mr. Luttrell [continuing]. projected window of when all of
those individuals will be in their comfort zone?
Mr. Burke. I do not. I am certainly happy to report that
back to this committee as soon as we have a timeline. We are
working on that now. In part of that, it is not just the
guidance and clarification to employees. It is also assessing
whether or not we need to change any regulations as part of
that. That assessment is ongoing right now.
Mr. Luttrell. Okay. I am familiar with multiple studies
that we have--that Congress has requested, and from what I
understand, the VA has them internal, and we are still waiting
on the results to be presented to us. If the court findings are
something that we can build the foundation off of, I would hate
to kick that proverbial can down the road if we can prep
everybody accordingly and then move forward and get this
problem set out of our way. Thank you for that, sir.
I yield to the ranking member.
Mr. Pappas. Thank you, Mr. Chairman. Mr. Burke,
Congressional Budget Office (CBO) has proposed tying TDIU
eligibility to age. Is that something that VA would support?
Mr. Burke. That is not. No, sir. We do not tie age to any
other factor within our disability compensation program, and
certainly do not believe it to be prudent with Individual
Unemployability either.
Mr. Pappas. Well, thanks very much. I share your concerns
there, and I hope that proposal will not ever see the light of
day. You did talk about, I was going to ask about the VASRD
issue, and you mentioned that it is in the process of being
changed and finalized. When would we expect to see that move
forward?
Mr. Burke. Well, we are in the process right now, sir, of
incorporating more than 800 comments.
Mr. Pappas. Uh-huh.
Mr. Burke. It takes a little bit. We do believe that in
Fiscal Year 2025, probably early mid-2025, that that will be
finalized.
Mr. Pappas. Okay. Thank you. The Advisory Committee on
Disability Compensation asked VA to share with it information
from a study that was completed in 2017 related to compensation
levels. VA has so far refused to share that material, stating
that it is dated and moot. Setting aside that fact, I am not
sure VA should be editorializing what information is relevant
to the advisory committee. I am wondering what harm VA sees in
sharing that information, and if you will commit to providing
this information to the advisory, advisory committee along with
results of your economic loss study?
Mr. Burke. Yes, sir. I will tell you, with respect to the
ACDC portion, there are really two factors. Number one, that
the premise of our internal review was based on the request to
assess and consider age as a factor, which, of course, we do
not support. That premise that predicated the internal study to
begin with. Second of all, the findings, the data, all of that
that went along with that internal review is significantly
outdated.
With that, we continue to take the position that is an
internal deliberative document, and that our way to approach,
kind of, the updating of the IU benefit is really through the
VASRD changes that I articulated earlier, and that is an
ongoing process that we just spoke about.
Mr. Pappas. Is there current data that could be married
with this data that you say is outdated and provided to the
committee?
Mr. Burke. Yes. I am not sure that current data would
support the ACDC only because, again, it was predicated on a--
--
Mr. Pappas. Uh-huh.
Mr. Burke [continuing]. the premise was to review age as a
factor, which, again, is not something that we support.
Mr. Pappas. Okay. In terms of VR&E, you discussed a little
bit about some of the issues surrounding that. There is a
statutory limitation. I am just wondering if you can respond if
there is a statutory limitation or any other limitation that
prevents a veteran with entitlement to TDIU from applying, and
if found entitled, participating in services from VR&E.
Mr. Burke. There are no limitations. There are no
limitations to any veteran receiving Unemployability and then
again, trying to pursue the benefits associated with those
that, of VR&E. It is not just VR&E. I would add that we have
programs from our transition space, personal career planning
space. In our transition phrase, we have education benefits and
the like. To answer your question, there is no limitation, sir.
Mr. Pappas. What kind of outreach does comp service and
VR&E do to let them know about opportunities?
Mr. Burke. We do outreach by means of, you know, our
regular notification letters. When somebody is granted in their
rating decision notice, they will get a letter that lets them
know other benefits that they are entitled to. There are other
various mailings and outreach strategies and campaigns. Of
course, our regional offices, when they are doing their local
outreach activities, they are also communicating to veterans
all of the portfolio of benefits that they are entitled to.
Mr. Pappas. Okay, Mr. Burke, I do not know if Mr. Pamperin
wants to take this one, but how many participants currently in
VR&E also have entitlement to TDIU? How many participants that
have entitlement to TDIU have successfully completed the VR&E
program and obtained and maintained suitable employment in the
last 5 years?
Mr. Pamperin. I appreciate the question, sir. Within the
last 5 years, there have been just a little under 3,000
veterans that are in receipt of TDIU that have applied and gone
through our program. Currently, within the last 5 years, almost
70, the number 68 folks, have successfully completed the
program through a positive outcome. Right now, we have actually
577 currently in a plan of service. The average time that
somebody is in the VR&E program is around 4 years. As they
continue to go through the program, that number will grow.
Mr. Pappas. Okay, my time is up, but those numbers feel
incredibly low, and maybe we can talk a little bit offline
about why that is the case. We appreciate your thoughts here
today.
I yield back.
Mr. Luttrell. Mr. McGarvey, you are recognized. 5 minutes,
sir.
Mr. McGarvey. Thank you, Mr. Chairman. I will be brief as
possible, given that votes have been called. Mr. Burke related
to some of the things that Mr. Pappas was asking about. In
particular, he was asking about the age, which I appreciate. I
want to know how the VA views the eligibility threshold and
should what is considered to be marginal employment be a higher
dollar amount?
Mr. Burke. Yes, sir. Thank you. As you are aware, VA does
not set that threshold. That actually is not established by VA.
We are simply using the poverty level established by the Census
Bureau, and those are the numbers that we utilize. Again, I
think with respect to the IU benefit itself, the thing that I
really want to portray is that the importance behind the
changes to the VASRD are really going to help better compensate
those specifically with mental disorders compared to what the
current does now. It will alleviate some of the need to utilize
Individual Unemployability because the evaluations assigned
using the potential new VASRD criteria will reflect, will
reflect such.
Mr. McGarvey. I think when we are looking at these veterans
who, again, who have been injured, who have some type of
disability, have something going on, if the idea behind TDIU is
to compensate a veteran for future lost earnings, how much
should the veteran's military occupation or post service
occupation factor into the compensation level, if at all?
Mr. Burke. Well, I think that we have a lot of factors that
we have to consider with respect to granting Unemployability.
It is the individual's current work history, it is their prior
work history. We do a 5-year lookback. We look to see, even in
our exams, if we require an examination, we are asking the
examiners to indicate what level of impairment of their earning
capacity is because of their service-connected disabilities. We
are looking at a lot of factors, not just the disability
evaluation, but those specific contentions and disabilities,
and their respective impact on earning capacity.
Mr. McGarvey. Thank you. I say many times in this committee
and in the larger committee, we talk about veterans benefits.
They are not a gift. These benefits have been earned by our
servicemen and women. I just want to know how much. How are we
helping those who may be making a little too much to qualify
for TDIU, but less than they need to make ends meet?
Mr. Burke. Well, we do have provisions within our process
that allow for still the award of Unemployability, even if they
are making a little above the marginal threshold, the poverty
level. We do have things like extra scheduler consideration.
There are review processes. My point is, if they are a dollar
over the threshold level, that is not a bar to them receiving
the benefit.
Mr. McGarvey. Thank you very much. Yield back.
Mr. Luttrell. Thank you, sir. Votes have been called, Mr.
Burke, we only have one round of questioning for you and Mr.
Pamperin and Mr. Barrans. Thank you for joining us today. I
expect to reconvene 10 minutes after the last vote back here in
this. Gentlemen, thank you very much.
[Recess.]
Mr. Self. [Presiding.] Thank you for coming today. Our
second panel of witnesses will include Mr. Marquis Barefield of
Disabled American Veterans (DAV), Mr. Figlioli of Veterans of
Foreign Wars of United States (VFW), and Mr. Mike Stoddard of
the Wounded Warrior Project, who is a constituent of mine.
Welcome. I think we are waiting on one other panel member.
Mr. Stoddard. Yes, sir.
Mr. Self. Let the record reflect that witnesses have
answered in the affirmative. Thank you again for being here.
[Witness sworn.]
Mr. Self. Mr. Barefield, you are now recognized for 5
minutes to deliver your opening statement.
STATEMENT OF MARQUIS BAREFIELD
Mr. Barefield. Thank you. Acting Chairman Self, Ranking
Member Pappas, and members of the subcommittee, thank you for
inviting DAV to testify about our insights, concerns, and
recommendations related to Total Disability based on Individual
Unemployability or TDIU. Veterans who are unable to work due to
service-connected disabilities, but whose disabilities do not
meet the requirements for a complete and total disability
rating under VA's regular rating schedule criteria may be
eligible to receive total compensation through TDIU. To
qualify, a veteran must have either a single service-connected
disability rated at 60 percent or have a combined disability
rating of 70 percent with at least one disability rated 40
percent or higher.
As of September 2023, about 6.8 percent of the
approximately 5 million veterans receiving disability
compensation do so as a result of TDIU, which is down from 7.8
percent 6 years earlier. Despite the downward trend, proposals
to limit TDIU, particularly based on a veteran's age, have
persisted. For example, VA's Fiscal Year 2018 budget submission
included a proposal to terminate TDIU ratings for veterans at
the age of 62 and cutoff TDIU benefits for any veteran already
in receipt of Social Security benefits.
More recently, the December 2022 CBO report, Options for
Reducing the Deficit, included a proposal to terminate TDIU
ratings for veterans at age 67 and cutoff TDIU benefits for any
veterans already in receipt of Social Security support. Another
option in the CBO report would require that once a veteran
meets their full Social Security retirement age, all disability
benefits would be reduced by 30 percent.
Mr. Chairman, today, many people work well beyond what was
once considered normal retirement age. To award TDIU to a
veteran at age 64 but deny it to a veteran at age 67 would be
unfair discrimination, desperate treatment, and wholly
unjustified from an equitable standpoint.
In fact, under current Federal regulations, age may not be
considered a factor in evaluating service-connected
disabilities or in determining entitlement to TDIU. Although
TDIU is based on the effect of disability on the individual, it
does not and should not discriminate on the basis of age. That
is why DAV strongly supports H.R. 6362, the Protecting Benefits
for Disabled Veterans Act, which would codify entitlement to
TDIU, including the prohibition against considering age as a
factor in determining eligibility.
It is also important to understand that TDIU is not a
retirement benefit, and it should not be considered as
comparable to either Social Security retirement or disability
insurance. Many veterans in receipt of TDIU who are unable to
work due to their disabilities may not have earned enough
credits to even qualify for Social Security retirement or might
receive very low benefits.
As such, proposals to reduce or cutoff TDIU when a veteran
becomes eligible for Social Security benefits could be
devastating for some veterans.
Another proposal that has been floated would link the award
of TDIU to a completion of a vocational assessment likely done
by the Veteran Readiness and Employment program, or VR&E. While
DAV is a steadfast supporter of VR&E, in fact, our national
service officers and I was one of them, complete a VR&E
vocational rehabilitation program during our training.
Mr. Chairman, most veterans, including those who have
serious injuries, illnesses, and disabilities from their
service, want to work. We do not support making a vocational
assessment a requirement for TDIU eligibility. We are concerned
that it could create an additional burden on veterans, as well
as a strain on VR&E's ability to fulfill its responsibility to
those veterans who need their services.
Finally, Mr. Chairman, we believe it is time to increase
the rates for disability compensation for all veterans,
particularly for veterans rated at 100 percent, including those
under TDIU. According to the Bureau of Labor and Statistics,
the national average salary is approximately $59,000. The rate
for veterans rated 100 percent disabled is approximately
$45,000, almost 25 percent less. It is time to change that.
Mr. Chairman, that concludes my statement, and I would be
happy to answer any questions you or members of the committee
have.
[The Prepared Statement Of Marquis Barefield Appears In The
Appendix]
Mr. Self. Thank you very much. The written statement of Mr.
Barefield will be entered into the hearing record. Mr.
Figlioli, you are now recognized for 5 minutes to deliver your
opening statement.
STATEMENT OF MICHAEL FIGLIOLI
Mr. Figlioli. Acting Chairman Self, Ranking Member Pappas,
members of the subcommittee, on behalf of the men and women of
the Veterans of Foreign Wars of the United States and its
auxiliary, thank you for the opportunity to provide our remarks
on this important issue. The TDIU program is essential for
veterans who can no longer maintain gainful employment due to
service-related injuries. It offers vital support not only to
veterans but also to their families, acknowledging the
sacrifices made and the lifelong impacts of their service.
Discussions around TDIU often focus on financial aspects,
but at its core, it is about supporting people whose lives have
been irrevocably changed. For countless decades, veterans have
returned home with life altering injuries from toxic exposures,
Improvised Explosive Device (IED) blasts, or contact with
harmful substances like radiation and dioxins. These injuries,
both visible and invisible, can prevent veterans from securing
employment.
For those who do not meet the schedule requirements for a
100 percent disability rating, the VA offers TDIU to ensure
they receive the support they need. Every system has room for
improvement, including the TDIU program. The VFW supports
enhancements to sustain or improve benefits for veterans, but
we must be cautious of unintended consequences for those who
rely on this benefit, especially the most vulnerable will
depend on this payment for their very survival.
TDIU has been a contentious topic in VA benefits
discussions, partly because it challenges conventional norms by
not considering age and eligibility decisions.
This exclusion of age often leads to debates about its
parity with civilian sector benefits. While some veterans
disabilities worsen with age, VFW believes most veterans would
prefer to work if they were able to do so. Critics often focus
on the financial cost of TDIU, especially when media attention
on war expenses fades.
However, cutting veterans benefits is historically unjust
and remains so. Benefits earned through service are never a
waste of money. Recent legislative changes like the Sergeant
First Class Heath Robinson Honoring our Promise to Address
Comprehensive Toxics (PACT) Act and the expansion of Blue Water
Navy benefits have increased the number of veterans eligible
for TDIU, many of whom are older and have been silently
suffering due to bureaucratic red tape.
Comparing TDIU to Social Security is misleading. TDIU
beneficiaries have service-connected disabilities, preventing
them from contributing to Social Security like their civilian
counterparts. Age is not a factor in TDIU eligibility, and VFW
supports this policy. The median age of the House of
Representatives is nearly 60 and the Senate is 65. It is off-
putting that members of these bodies, which suggest other
Americans, should not be considered part of the workforce
simply due to age. Elder workers are entitled to their earned
wages and associated benefits.
Veterans receiving TDIU did not have that capability and
should not be penalized due to their documented inability to
work based on their service-connected disabilities. Advanced
healthcare has increased life expectancy and work for potential
veterans. A proposal to cut TDIU at retirement age equated
unfairly with Social Security, ignoring the unique nature of
service-related disabilities.
The VR&E program offers veterans training for new career
fields, and those on TDIU can potentially benefit from it.
However, consistent and effective implementation of VR&E is
lacking. VFW advocates for better identification and support
for eligible veterans, including automatic invitations to apply
for VR&E in decision letters allowing veterans to make informed
choices about their participation. As the world and technology
has evolved over the past several decades, the needs of our
veterans have as well.
Service members are trained in the art of warfare, whereas
veterans need to be trained in civilian fields, many of which,
such as coding, aeronautics, robotics, and others, did not even
exist a generation ago. The economic opportunity for better
earnings potential is vastly greater for veterans who receive
this essential training from VR&E. For 125 years, the VFW has
championed the needs of veterans and their families. While some
view TDIU as costly, it represents the true cost of war.
Veterans sent to dangerous places return changed, and it is
our duty to ensure they have the researchers to survive and
thrive despite their service-connected disabilities. The
collective debt to these veterans is unrepayable, but ensuring
their survival is the least we can do.
Mr. Chairman, this concludes my testimony, and I am happy
to answer questions you may have.
[The Prepared Statement Of Michael Figlioli Appears In The
Appendix]
Mr. Self. Thank you. The written statement of Mr. Figlioli
will be entered into the hearing record. Now, I recognize Mr.
Stoddard for your opening statement for 5 minutes.
STATEMENT OF MIKE STODDARD
Mr. Stoddard. Acting Chairman Self, Ranking Member Pappas,
and distinguished subcommittee members, on behalf of Wounded
Warrior Project, I want to thank you for this opportunity to
speak about TDIU. We share your commitment to ensuring VA
continues to support our veterans who have earned this benefit
through their service and their sacrifice. Wounded Warrior
Project has been working with post-9-11 generation for 20
years, and our goal is to ensure every veteran receives the
benefits they have earned in a manner that honors their
service.
Across more than a dozen programs and services that we
provide at no cost to the veteran, one of the first and most
impactful interactions many of our warriors have with our
organization is with our benefit services team. Helping
warriors with their VA claim is just one element of our
holistic approach to helping warriors on their path to mental,
physical, and financial wellness, but our research tells us
that this is a critical part.
Our Annual Warrior Survey reveals that service-connected
injuries and complex health problems play a major role in
sustaining gainful employment. When looking at disability
ratings alongside employment status, approximately half of our
responding warriors who were unemployed and looking for work
had a 100 percent disability rating. Among responding warriors
who were not looking for work, about 7 in 10 had a 100 percent
disability rating.
Why are these numbers important? A 100 percent rating is
often associated with unemployment and does not adequately
insulate a warrior from feeling financial strain. Almost two-
thirds of our warriors who reported 100 percent disability
rating also reported they did not have enough money to make
ends meet last year. To be clear, some veterans have conditions
where work is not going to be possible now or in the future.
For others, TDIU is a part of the larger picture that includes
getting back to work eventually.
Wounded Warrior Project is committed to helping disabled
veterans seamlessly transition into the civilian workforce.
In many instances, we inform warriors about the
opportunities provided by VR&E before pursuing a TDIU rating.
Here is an example of how we help. Despite a decorated career,
an Army sergeant had a service-related injuries that left him
eligible for TDIU. While this financial security was a relief,
the Army sergeant yearned to continue contributing. He reached
out to both VR&E and Wounded Warrior Project for support on his
employment endeavors.
VR&E counselors with expertise in veteran disabilities
began crafting an employment plan that leveraged the sergeant's
transferable skills and accommodated his limitations.
Meanwhile, we offered support through benefit services, alumni,
our Warriors to Work programs, connecting the sergeant with a
network of veterans who understood his unique challenges and
could offer guidance on navigating a civilian career path.
This combined arms approach with VR&E's practical tools and
Wounded Warrior Projects camaraderie positioned the sergeant
for successful transition back into gainful employment. For
reasons like this, we support the VR&E program as a pathway to
long-term employment of disabled warriors. We do have some
suggestions for how these systems can work better together.
First, we strongly support the removal of the VR&E
delimiting date. Under current regulations, a veteran is only
eligible for VR&E for 12 years from the date of discharge or
their first disability rating.
If disabilities worsen or new disabilities arise, some
veterans may find the VR&E option is no longer there and TDIU
becomes one of the only reasonable options left. Removing the
delimiting date would fix this.
Second, we support making VR&E easier to access for
veterans who have established TDIU. Although pursuing VR&E
should never be a prerequisite to receive TDIU, it can be a
launch pad to return to work when a veteran is ready. Since the
evidence needed to receive TDIU generally exceeds what is
needed to enter VR&E, we would support a more integrated onramp
for a program that can prepare warriors to reenter the
workforce.
Third, we recommend that the VA do a review of the overall
effectiveness of reducing a veteran on TDIU to their overall
original disability rating after securing gainful employment
for a period of 12 months. By looking into this issue, we can
ensure the appropriate steps to ensure veterans with a TDIU
rating have the support they need to be gainfully employed by
removing financial barriers that may inhibit them from the
earliest steps back into the workforce.
Finally, we recommend exploring the development and
implementation of a VR&E resource hub. Current VR&E staffing
and resources are not consistent across the country, so the
same opportunities are not available to all veterans seeking
VR&E support. We recommend creating solutions to help all
veterans, regardless of where they live and access service to
have equal opportunity to leverage VR&E resources in their
pursuit of gainful employment.
Thank you for the opportunity to testify and look forward
to your questions.
[The Prepared Statement Of Mike Stoddard Appears In The
Appendix]
Mr. Self. Thank you to each of you for being here and for
what you do for our veterans. I appreciate your testimonies. I
now recognize myself for 5 minutes and your written statement,
Mr. Stoddard will be entered in the hearing record. I now
recognize myself for 5 minutes.
I want to go back to Mr. Barefield about increasing any
mandatory spending amounts. There is one offset that is used by
this committee, by this Congress for mandatory veterans
programs that we add to the offset. You all, all represent
major VSOs. This question is to you, the only offset, and I say
it is not an offset, is that we add to veterans housing loan
fee in the out years. I need the American people--and I have
raised this with the major VSOs before. We pay for new
mandatory spending in any veteran program, any new veteran
program on the backs of veterans alone in the future. It is not
an offset. It is an addition to the budget.
With that said, I will move to my first question, and it is
for Mr. Stoddard. The PACT Act, I have talked to young veterans
who have met the presumptive criteria for the PACT Act, but who
have no symptoms and they have not filed for the PACT Act
because they do not have any symptoms. They could 15 years from
now. How does that impact that VR&E date that you mentioned?
Mr. Stoddard. I appreciate the question Mr. Self. I think
when we talk about, we want to draw service connection is
required to get into the VR&E program.
Mr. Self. Right.
Mr. Stoddard. Important that if it is not PACT Act
related----
Mr. Self. Right.
Mr. Stoddard [continuing]. and they have that, the most
important thing I would recommend to anybody that is going to
pay attention to this is they just need to get in and get filed
for a claim so we can get their disability. The most important
thing is I do not want them to overthink it. I want them to
come see us. Let us advocate for them and find a way to get
them connected to those resources that they so richly deserve.
Mr. Self. I agree with your suggestion. Mr. Figlioli, how
can veterans be better educated about the VA vocational
rehabilitation services available to them? What do we need to
do?
Mr. Figlioli. Yes.
Mr. Self. We hear a lot in this committee about our
veterans simply do not know what is available to them.
Mr. Figlioli. Thank you, Mr. Acting Chairman. Really, you
know, a good, strong, robust marketing campaign very similar to
the PACT Act. PACT Act was one of the biggest things that is
been advertised from VA in a very long time.
Mr. Self. Right.
Mr. Figlioli. You know, we have got social media platforms
left and right. We have them everywhere. VA definitely uses
them. You also have the opportunity to partner with VSOs,
whether it is the major VSOs, minor VSOs. Use those social
media platforms as well to advertise the availability of VR&E.
Reach as many veterans as you can. A lot of times it is
somebody that is on the program, they understand what the
benefit is, and you really have to rely on word of mouth. We
are doing mass mailings. Lots of letters go up from VA. We have
had hearings on letters. My inbox is inundated every day with
electronic messaging from the Comms Department from VA. I think
if we all work together and probably leverage social media
quite a bit, we could reach more veterans as well.
Mr. Self. Mr. Barefield, would you like to take a whack at
that one?
Mr. Barefield. Yes. VA has already started doing
campaigning where they talk about healthcare. They could also
do that same campaigning talking about other services that are
available to veterans. On my commute in and out of DC, I listen
to WTOP radio station, and they have in constant rotation
commercials that talk about VA healthcare; coming back to VA to
get your healthcare. They could use those same media campaigns
to talk about other benefits and services that are available to
them through VA.
Mr. Self. How about our rural veterans? We have got many
veterans that live in rural areas, my district included.
Mr. Barefield. In cases of veterans that are in rural
areas, then along with the social media campaigns that were
mentioned, then that is when you could use mass mailings to
veterans in the rural areas to reach out to them to make sure
that they get the same message that veterans that live in
metropolitan areas receive.
Mr. Self. Thank you. Mr. Stoddard, back to your proposal
for a steady glide path off of TDIU once gainful employment is
had. Would you elaborate on that?
Mr. Stoddard. Yes, sir, and I appreciate that question.
What we are finding is during this off ramp, in the 12-month
window for VR&E, we have veterans. It goes back to your
education and informing what veterans know. For a year they
have been gaining the full rate of the TDIU and they have been
getting the gainful employment which they have been getting.
They have become accustomed to this. When the VR&E becomes
at that 12-month mark and the VA decides to take them back to
their original disability rating, and I use the example of 100
percent to 90 percent is $1,000 less in a pocket of a veteran.
As much as we want to prepare them for that off ramping and
saying, hey, this is going to happen, we know that the real
landscape for veterans are they are going to pay and get
accustomed to that money in their pocket.
Our thought is we start to off ramp and think about how we
educate them early on into the process and then make sure their
employment matches whatever that off ramp is going to be.
Mr. Self. Thank you very much. Now, I recognize the ranking
member for 5 minutes of questions.
Mr. Pappas. Oh, thank you very much, Mr. Chairman. As I
asked VA earlier, I wanted to ask all of you this, if your
organizations or you personally support tying TDIU to age, as
CBO has suggested?
Mr. Figlioli. Mr. Ranking Member, no, we do not. The law of
the land is that age is not tied to a benefit, nor should it
be, and we will not support that concept.
Mr. Pappas. Thank you. Mr. Barefield.
Mr. Barefield. No, we do not support having age tied to
this current TDIU benefit.
Mr. Pappas. Okay. Mr. Stoddard.
Mr. Stoddard. Wounded Warrior Project does not support----
Mr. Pappas. Okay.
Mr. Stoddard [continuing]. tying age to TDIU.
Mr. Pappas. Well, thank you. I think that is why this
proposal should be a non-starter. Mr. Stoddard, you were
talking about streamlining eligibility for TDIU recipients into
VR&E. Given that there is significant overlap in eligibility,
this kind of categorical eligibility for TDIU recipients makes
sense. Creating a fast lane into VR&E could have some
concerning implications, you know, for veterans could crowd out
other veterans from the program or further overburden an
already overworked VR&E workforce.
I am wondering if Wounded Warriors Project has considered
what it would mean for current enrollees in VR&E and their
level of service if we see an influx of thousands of new
veterans that were added to the roles on an annual basis?
Mr. Stoddard. Ranking Member Pappas, I appreciate that
question. I think what our message here is very clear is that
the workload, actually, we think, would be, because they have
already met the requirements of VR&E----
Mr. Pappas. Uh-huh.
Mr. Stoddard [continuing]. so, the process of having to
counsel and do those things really takes that workload off of
those counselors that could focus on counselors doing that
because they have already met the requirements of VR&E. They do
not have to go through the process of trying to figure out do
they belong there. We think that will help. Obviously, there is
a concern. We want to make sure that the workload and the
amount of people taking care of our veterans is represented
appropriately, but we think that this would be a helpful
process in getting our folks taken care of.
Mr. Pappas. Okay. Wondering if others on the panel want to
reflect on whether veterans on TDIU should be, whether it
should be tied to VR&E as a condition of eligibility?
Mr. Figlioli. No. No, Mr. Ranking Member. It is important
to get people onto VR&E. Let us get them retrained into new
careers. If they need to get off the rolls, if they want to get
off the rolls, let us give them that opportunity.
Mr. Pappas. Uh-huh.
Mr. Figlioli. Yes, both programs need to exist, need to
coexist. I think VFW's concern is that VA has eliminated some
Full-Time Equivalent (FTE) in the VR&E program and now we are
looking to add more people to it. You know, if we found funding
and a lot of staff to add for PACT Act processing and claims
processing should have had the downstream thought about the
ancillary benefits of a claim; and, they should have had some
foresight to say, well, people are going to want to maybe get
on to VR&E and retrain for a career. Let us see if we cannot
fill those gaps with these staffing levels.
Mr. Pappas. Thank you. Mr. Barefield.
Mr. Barefield. Yes. DAV does not support making a
vocational assessment a requirement for TDIU. As mentioned in
my oral remarks, when you are talking about putting additional
claims into the VR&E system, you are going to put a strain on
the current workload that those counselors have. As it was just
mentioned, in the upcoming budget, they want to reduce VR&E
staff by 60 people.
You are talking about an influx of claims and a reduction
of people. That is naturally going to lead to a backlog, and
that is going to be creating a bigger problem. That is not a
successful plan.
Mr. Pappas. Okay, thank you for that. Mr. Figlioli, maybe I
could turn to you for this one. If you would agree that
veterans often work in fields that are not directly or only
tangentially related to the work that they are doing in the
military. Similarly, veterans, like civilians, often change
careers several times in their adult life. Correct?
Mr. Figlioli. Yes, sir. You know, the workforce from post-
World War II, Korea, and Vietnam is different than what it is
today. Today it is far more technically based. More people are
apt to have some kind of a tech interest. Coding, web design.
Technology is involved in everything that we do, whether we are
broadcasting this hearing or preparing for the hearing. You
know, we rely on data, research.
Everything is tech-linked. I do not think that the average
veteran today is more or less likely to, you know, pick a blue-
collar job. We also need to be prepared to support them as well
and be prepared for the change. If, again, if people look for a
new career, the benefits available to them, and they can get
into a career field that does not exacerbate their
disabilities, but they have options. Do they want to have a
blue-collar job? Do they want to have a white-collar job? Still
receive that benefit.
Mr. Pappas. Yes, it seems like it would be difficult to
predict someone's future earnings potential based just on their
Military Occupational Specialty (MOS), even if it directly
translates into a civilian profession. It seems like that is
what you are saying, correct?
Mr. Figlioli. Yes, sir. You know, the earnings potential
today is far greater than it was at any other time. You know,
let them earn what they can, as much as they can. Let us find
them a job that they can have that maximum earnings potential
but sustain the benefit.
Mr. Pappas. Given that, does anyone think that VA
compensation, TDIU or otherwise, should be based on MOS or
civilian occupation? Mr. Stoddard.
Mr. Stoddard. Ranking Member Pappas, absolutely not. I
think the example I would use is if you took that where I got
out of the Army 10 years ago, my earning potential and where I
am at now may be drastically different. Wounded Warrior Project
would not be in support of that.
Mr. Figlioli. VFW would agree with Mr. Stoddard. I think
that is where we stand.
Mr. Pappas. Thank you. Mr. Barefield.
Mr. Barefield. We do not agree with that.
Mr. Pappas. Okay. Well, thanks for your responses. Sorry,
Mr. Chair, for going over, but I yield back.
Mr. Self. I want to thank all of our witnesses for
testifying before us today on this important issue of ensuring
that TDIU benefit works for today's veterans who sacrifice for
our Nation and are unable to work as a result. With that, I
recognize Mr. Pappas for any closing remarks.
Mr. Pappas. Thank you, Mr. Chairman. To answer the question
posed at the top of the this hearing, does a Total Disability
Rating based on Individual Unemployability properly compensate
today's veterans? The answer is unequivocally no. How could it
possibly? How could a monetary benefit, no matter the scale,
adequately compensate someone whose life has been altered so
significantly by their service to this country that they have
been rendered unable to work? We simply cannot.
The best we can do is to try to get as close as we can, and
the TDIU program at VA helps in that effort by individualizing
what can be an often rigid system. I appreciate the
subcommittee having this hearing to help highlight a sometimes
obscure program and to shed some light on ways that VA may help
veterans who are unable to work or are willing to re-enter the
workforce but need some assistance in doing so. Lost in this
conversation, though, is whether or not the compensation rates
for 100 percent service connected veterans, scheduler or TDIU,
are themselves high enough. I would argue that they are not,
and this Congress should look at raising them beyond the annual
cola, but that is a discussion for another time.
With that, Mr. Chairman, I join you in thanking all of the
witnesses before the panel today, and I yield back.
Mr. Self. Thank you, Ranking Member Pappas, and thank you
all again for your participation in today's hearing. I ask
unanimous consent that all members have 5 legislative days to
revise and extend their remarks and include extraneous
material. I plan to put for the record a question to you
officially. Without objection. So, ordered. This hearing is
adjourned. Thank you.
[Whereupon, at 12:00 p.m., the subcommittee was adjourned.]
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A P P E N D I X
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Prepared Statements of Witnesses
----------
Prepared Statement of Ronald Burke
Good morning, Chairman Luttrell, Ranking Member Pappas, and Members
of the Subcommittee. Thank you for the opportunity to appear before you
today to discuss the Department of Veterans Affairs' (VA) individual
unemployability (IU) benefit. With me today are Nick Pamperin,
Executive Director, Veteran Readiness & Employment (VR&E) Service,
Veterans Benefits Administration (VBA), and David Barrans, Chief
Counsel, Office of General Counsel.
Overview
The IU benefit fills a critical gap when the VA Schedule for Rating
Disabilities (VASRD) does not fully address the impact of service-
connected disability in a Veteran's circumstances. The intent of the
VASRD is to fairly compensate Veterans for injuries incurred or as the
result of their military service. To the extent those disabilities
impair earning capacity of the average Veteran, the VASRD nonetheless
cannot always adequately compensate an individual Veteran in their
specific circumstances. IU is an important provision that enables VA to
address this, such as when a Veteran's specific impairment does not
meet the disability rating criteria for a schedular 100 percent
evaluation, yet there is sufficient evidence of the Veteran's inability
to obtain or maintain gainful employment. A qualified Veteran would be
compensated at the 100 percent evaluation rate utilizing VA's IU
authority. In Fiscal Year (FY) 2023, VA provided over $7 billion in IU
benefits to 377,108 beneficiaries and saw a 21.7 percent increase in IU
beneficiaries over the past 10 years (2013-2023).
A Rating Veterans Service Representative (RVSR) assigns IU ratings
when the evidence of record shows a Veteran has a minimum combined
evaluation criteria of a single service-connected disability rated at
60 percent disabling or more, or has 2 or more disabilities at a
combined evaluation of 70 percent or more with at least 1 service-
connected condition rated at 40 percent or more, and, in the judgment
of the decision-maker based on the evidence of record, is not able to
obtain or maintain substantially gainful employment due solely to
service-connected disability(ies). In exceptional circumstances, claims
processors may refer cases that fail to meet the minimum combined
evaluation criteria to the Executive Director of Compensation Service
for consideration of an IU rating on an extra-schedular basis.
Authority and Historical Background
Section 1155 of title 38, United States Code, charges the Secretary
with responsibility for developing and applying a disability rating
schedule, known as the VASRD, that is based, ``as far as practicable,''
upon the average impairments of earning capacity resulting from
service-connected disabilities. The IU benefit has a long history in
regulation. In 1925, the VASRD provided the first definition of total
disability. Total disability was defined as an impairment of mind or
body that is sufficient to render it impossible for the average person
to follow a substantially gainful occupation. In the following decades,
the regulations regarding IU have been updated numerous times to
clarify eligibility requirements. Per current 38 C.F.R. Sec. 4.16,
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.
Eligibility Criteria
Under current regulations, Veterans who are unable to secure or
follow a substantially gainful occupation due to their service-
connected disabilities may be eligible for IU. Generally, IU
eligibility is established if a Veteran has either 1 service-connected
disability rated at 60 percent or more, or a single service-connected
disability rated at 40 percent or more with other service-connected
disabilities that combine to equal or exceed 70 percent. The single 60
percent or 40 percent disability may be established based upon
disabilities of 1 or both upper or lower extremities, disabilities
resulting from common etiology or a single accident, disabilities
affecting a single body system, multiple injuries incurred in action,
or multiple disabilities incurred as a prisoner of war.
When deciding if a Veteran is entitled to IU, VA reviews all
available evidence and considers the current severity of the service-
connected disability(ies) that prevent substantially gainful
employment; the impact of the service-connected disability(ies) upon
employability; and employment status. Claims processors consider
economic and non-economic factors impacting employability, including
but not limited to evidence concerning the Veteran's current employment
status, past employment history, educational/training history, and
functional impairment arising from service-connected disabilities.
A request for a total disability evaluation based on IU, whether
expressly raised by the Veteran or reasonably raised by the record, is
not a separate claim for benefits. Rather, the IU claim involves an
attempt to obtain an appropriate rating for a disability or
disabilities, either as part of the initial adjudication of a claim or
as part of a claim for increased compensation if the disability upon
which IU is based has already been found to be service connected.
While a substantially complete VA Form 21-8940, Veteran's
Application for Increased Compensation based on Unemployability, is
necessary to provide VA with information needed to substantiate
entitlement to IU, it is not necessary to raise the issue of IU. This
form is required to establish entitlement to IU because it gathers
relevant and necessary information regarding a claimant's disabilities
and employment and educational histories. This form requires the
Veteran to furnish an employment history for the 5-year period
preceding the date on which the Veteran last worked. The form concludes
with a series of sworn certification statements, and in endorsing it, a
Veteran thereby attests to their employment status and signals
understanding of the IU benefit's incompatibility with substantially
gainful work. As part of the development of claims involving IU, VA
contacts the Veteran's noted employers and asks them to provide
information concerning the Veteran's employment history, including the
dates of employment, the type of work performed, and the reasons for
termination of employment if the Veteran is not currently working.
If VA decides a medical examination is necessary to determine
whether a Veteran is entitled to IU, an appropriate examination or
opinion request is submitted to a Veterans Health Administration
medical facility or a VBA contract examination provider. Medical
examiners follow the appropriate Disability Benefits Questionnaires to
perform a complete and adequate examination for rating purposes,
answering all questions, and providing opinions as requested. The
medical examiner is requested to comment on the Veteran's ability to
function in an occupational environment and describe functional
impairment caused solely by the service-connected disabilities.
In some cases, a Veteran's service-connected disability(ies) may
improve, but this does not necessarily result in the reduction of the
total disability rating based on IU. In such cases, VA regulation 38
C.F.R. Sec. 3.343(a) and (c) require that IU ratings will not be
reduced, in the absence of clear error, without medical evidence
showing material improvement in physical or mental impairment. In all
rating reduction cases, a reduction in the evaluation may only be
effectuated if the improvement is shown by a thorough examination and
evidence of an improvement in the Veteran's ability to function under
the ordinary conditions of life, including employment.
Training
To ensure consistent and quality findings of IU, VBA requires
completion of standardized training on the subject. VBA requires all
Veteran Service Representatives (VSR) and Rating Veteran Service
Representatives (RVSR) to complete training on IU claims processing
during Virtual and In-Person Progression (VIP) Training. VSRs complete
approximately 2 days of IU course work, activities, and simulated cases
to include a learning assessment. VIP provides employees with hands-on
training, including simulated and live case work training with computer
applications, policies, and laws. The training enables VSR employees to
define IU and determine eligibility requirements, determine evidence,
including medical evidence, required to process claims involving IU,
and identify resources available to obtain additional evidence. The
training also allows VSRs to list the steps for processing a claim
involving IU, identify any ancillary benefits available to the
Veteran's dependents, and understand the employment and income
verification requirements for Veterans in receipt of IU benefits.
Similarly, the VIP training program enables RVSR employees to define
IU, define eligibility requirements, determine evidence requirements,
determine effective dates, and rate and process IU claims.
Additionally, claim processors are assessed annually through the
Competency Based Training System (CBTS). CBTS is designed to identify
potential knowledge and skill gaps at the individual level and assign
remediation to address the potential gap. Additional national-level
curriculum can be delivered at the station level based on individual
error trends.
Marginal Employment and Protected Environment
Over the last several years, VA has examined, through various court
decisions, studies, and reports completed by stakeholders, if the
current IU benefit properly compensates Veterans who are unable to
secure and maintain substantially gainful employment because of their
service-connected disability(ies). If a Veteran has a service-connected
disability(ies) that meets the eligibility criteria and earned income
does not exceed the amount established by the U.S. Census Bureau
(Department of Commerce) as the poverty threshold for one person, the
Veteran is considered only marginally employed and may be entitled to
IU. Veterans may also be found to be marginally employed when their
income exceeds the poverty threshold if their employment is in a
protected environment such as a family business or sheltered workshop.
In determining entitlement to IU, marginal employment does not qualify
as substantially gainful employment.
Over the last several years, a number of court decisions\1\ have
found that VA's regulatory definitions of ``marginal employment'' and
``protected environment'' lack specificity, and have encouraged VA to
engage in rulemaking to better define these terms. In January 2024, the
Court of Appeals for Veterans Claims issued a decision in LaBruzza v.
McDonough (2024 WL 259882) regarding what constitutes a protected
environment for purposes of determining entitlement to IU. In that
decision, the court concluded that ``employment in a protected
environment,'' as used in VA regulations, is unambiguous and means ``a
lower-income position that, due to the veteran's service-connected
disability or disabilities, is shielded in some respect from
competition in the employment market.''
---------------------------------------------------------------------------
\1\ Ortiz-Valles v. McDonald, 28 Vet.App. 65 (2016); Cantrell v.
Shulkin, 28 Vet.App. 382 (2017); Arline v. McDonough, 34 Vet. App. 238,
242 (2021)
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The court elaborated that common characteristics of employment in a
``protected environment'' include employment sheltered from the open
labor market and employment based on something other than the strict
qualifications of the employee. According to the court, protected
environments include working situations ``shielded, covered, or guarded
from an outside source of harm,'' with the harm being a Veteran's
inability to secure or follow a substantially gainful occupation in the
open labor market because of service-connected disabilities.
The court cautioned that the ``protected environment'' exception
that allows a finding of entitlement to total disability based on IU
when a qualifying Veteran has income exceeding the poverty level must
be narrowly read lest it supplant the general rule that annual income,
limited by the poverty threshold, is a key criterion for determining IU
eligibility. The court recognized that determining whether employment
is in a protected environment is highly fact specific and hinges on
context. The court also noted that an employee's receipt of reasonable
accommodations beyond those legally required by the Americans with
Disabilities Act may be indicative of employment in a protected
environment. VA currently is drafting guidance for claims processors
regarding how to apply this decision and considering whether regulatory
updates may be needed considering that decision and others.
IU Benefit and Mental Disabilities
On February 15, 2022, VA published a proposed rule in the Federal
Register to amend the portion of the VASRD for evaluation of the impact
of mental disorders. The proposed evaluation criteria measures a
Veteran's essential ability to participate in a work environment and
the impact of the mental disorder on earning capacity via a
comprehensive assessment of occupational and social functioning. The
proposed new evaluation criteria would more accurately capture the
occupational impairment caused by mental disabilities and provide more
adequate compensation for the earnings losses experienced by Veterans
with service-connected mental disorders. If finalized, the proposed
change would help alleviate current disparities with evaluations of
mental disability(ies), so that Veterans with such challenges may
receive adequate compensation using VASRD criteria, rather than
receiving IU.
Verifying Earnings and Employment for Continued IU Eligibility
VA monitors changes in the employability of Veterans receiving IU
benefits through a yearly Social Security Administration (SSA) wage
data match. If a Veteran is receiving IU and is identified as having
verified earned income over the poverty line, VA sends the Veteran a VA
Form 21-4140, Employment Questionnaire, with an accompanying VA Form
21-4138, Statement in Support of Claim. The Veteran will be required to
identify and explain any earned income on the VA Form 21-4140. In
addition to these forms, VA also sends the Veteran a due process notice
of proposed adverse action that is sufficient for discontinuation of IU
due to any of the following: failure to complete and return the VA Form
21-4140; an insufficient response on the VA Form 21-4140; or a return
to gainful employment.
If a Veteran in receipt of IU has been employed for 1 year or more,
VA will consider whether the employment is sustained, gainful
employment, or marginal employment, separately from whether the
Veteran's condition has improved or not. VA will also determine if an
examination is necessary to evaluate employment status or
employability. If VA determines gainful employment has been sustained
for 1 year or more, VA will discontinue entitlement to IU the last day
of the month 60 days after due process notice was provided.
Monitoring changes in employability is not required when the
Veteran has not been identified in the SSA data match as having
verified earned income above the poverty line; has an IU rating that
has been in effect for 20 or more continuous years; or has had an IU
rating replaced with a 100 percent schedular evaluation.
Comparison of Social Security and IU Benefits
An important distinction between the SSA benefit and the VA IU
benefit is that SSA disability is based upon the totality of an
individual's disabling conditions. In contrast, IU considers only
service-connected disabilities. Hence, Veterans who receive SSA
disability benefits may not be entitled to IU if their SSA disability
determination was based upon any disabling conditions that are not
related to the individual's military service. Conversely, Veterans
receiving SSA benefits, including SSA retirement benefits earned
through payroll contributions, can still be entitled to IU if they also
meet VA's eligibility requirements.
VA does not preclude IU eligibility based upon the age of an
eligible Veteran or the fact that they may have retired and/or elected
to receive SSA retirement benefits upon reaching their SSA retirement
age. Under VA regulations, age cannot be considered as a factor in
service-connected claims. Veterans who are 62 or older may therefore be
eligible to receive retirement benefits from SSA and VA IU benefits.
VA does not penalize Veterans who are eligible to receive IU
compensation based upon their election to receive the SSA retirement
benefits they have earned. VA recognizes that some Veterans may prefer
to engage in substantially gainful employment beyond an age where they
are entitled to draw the SSA retirement benefits they earned but may be
unable to do so because of their service-connected disabilities. VA
also recognizes that a Veteran's decision to discontinue work and draw
SSA retirement benefits they earned may be influenced by the
impediments service-connected disabilities impose on their continued
ability to perform in their occupations.
The issues of Veterans receiving both IU and SSA benefits and of
age as a factor in IU decisions have been raised by various parties
over the years. A 2015 report from the U.S. Government Accountability
Office (GAO) \2\ on IU included a recommendation that VA study whether
age should be considered when deciding if Veterans are unemployable. In
October 2017, in response to that recommendation, VA completed such
study, which first compared two potential age-specific IU eligibility
policies: (1) placing a cap on the age at which Veterans can begin
receiving benefits; and (2) placing restrictions on the age for both
initial claimants and existing beneficiaries. VA concluded that both
alternative eligibility policies would reduce the number of Veterans
receiving IU benefits. Upon reviewing the results of the study, VA
decided not to make policy changes regarding the IU benefit.
---------------------------------------------------------------------------
\2\ https://www.gao.gov/products/gao-15-464
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In 2014, the Congressional Budget Office (CBO) proposed several
options to reform the disability compensation program,\3\ including
discontinuing IU benefits when the Veteran reaches SSA's full
retirement age. The rationale provided was that most Veterans who are
older than SSA's full retirement age would not be in the labor force
because of their age and that a lack of earnings among them would
probably not be attributable to service-connected disabilities. CBO
also noted that Veterans over SSA's retirement age who currently
receive IU benefits would likely have income from other sources,
including the regular schedular VA disability compensation benefit in
addition to SSA retirement benefits. Recently, CBO addressed ending IU
payments to disabled Veterans at the full retirement age for Social
Security in its options for reducing the deficit, published in December
2022.\4\
---------------------------------------------------------------------------
\3\ https://www.cbo.gov/sites/default/files/113th-congress-2013-
2014/reports/45615-VADisability_OneCol_2.pdf
\4\ https://www.cbo.gov/sites/default/files/113th-congress-2013-
2014/reports/45615-VADisability_OneCol_2.pdf
---------------------------------------------------------------------------
VA currently has no plans to limit IU based on age or concurrent
receipt of SSA retirement or disability benefits, recognizing that the
IU benefit fills a critical gap when the VASRD fails to fully address
the impact of disability in a specific Veteran's circumstances.
VA Occupational Training and Counseling
The mission of VA's VR&E program is to assist qualified Service
members and Veterans with service-connected disability(ies) prepare
for, obtain, and maintain suitable employment or maintain a life of
independence. VR&E achieves this mission by providing comprehensive
vocational counseling services to transitioning Service members and
Veterans to ensure goals are suitable and attained.
Eligibility for VR&E benefits is determined for Veterans who
received an honorable or other than dishonorable discharge, have a VA
service-connected disability rating of at least 10 percent, and apply
for services. Following eligibility, entitlement must be determined and
is based on the establishment of a barrier to employment resulting from
a service--connected disability(ies). A significant barrier must be
established for Veterans rated 10 percent.
Per 38 U.S.C. Sec. 1163, each time a Veteran is granted payment at
the total disability rate based on IU during the period beginning after
January 31, 1985, VR&E Service will be notified to provide counseling.
This includes information about the VR&E program such as how to apply,
eligibility, and services available. When a Veteran in receipt of IU
applies to the VR&E program, a feasibility assessment must be completed
to determine appropriate services.
In some instances, a Veteran's functional limitations due to
disability(ies) impact their ability to participate in a rehabilitation
program on a full-time basis. In these circumstances, VR&E offers
Reduced Work Tolerance services that are approved when the Veteran's
disability conditions prevent the pursuit of full-time training, based
on recommendations from a medical provider. The Veteran can then be
assisted with obtaining less than full-time employment.
During Fiscal Year 2023, VA provided VR&E services to 131,179
Veterans and Service members, and 17,135 Veterans have successfully
completed their VR&E program. During Fiscal Year 2023, VBA paid over
$1.6 billion in VR&E benefits. As of May 1, 2024, VR&E has 151,769
Veteran participants with 90,380 enrolled in Long-Term Services, which
helps program participants obtain education and training needed to find
work in a different field that better suits current abilities and
interests of participants.
VR&E Longitudinal Study
The VR&E Longitudinal Study, required by 38 U.S.C. Sec. 3122,
follows 3 cohorts of former participants over a 20-year period and
details the of self-reported outcomes of those completing the program.
The Longitudinal Study provides insight into four major areas:
employment, income, home ownership, and use of supplemental programs
for VR&E enrolled Veterans. The study finds that the median annual
household income of Veterans who successfully complete the program is
$95,000, which is 65 percent higher than Veterans who did not complete
the VR&E program. Additionally, these Veterans have homeownership rates
of 76 percent, which is 15 percentage points higher than Veterans who
do not complete the VR&E program. The employment rate for rehabilitated
Veterans steadily increased from 45 percent in Fiscal Year 2012 (the
first year of survey data collection) to 72 percent 5 years later in
Fiscal Year 2017, and to 75 percent in Fiscal Year 2022.
Additional Data
The VA chapter 31 benefit assists Veterans with service-connected
disabilities prepare for, find, and keep suitable employment. During
the past 5 years, VA received nearly 3,000 applications for VR&E
benefits for Veterans in receipt of IU, of which 98 percent were found
entitled to chapter 31 benefits. VR&E Service has seen an average of
549 IU applicants per year for chapter 31 benefits. Since 2020, VA has
witnessed the successful rehabilitation of 70 Veterans in receipt of IU
cases. It is noteworthy that there has not been a significant disparity
in the discontinuance rates between IU cases and the entire VR&E
population. Specifically, 1,994 Veterans in receipt of IU cases were
discontinued, comprising 66.8 percent of total cases, a figure quite
like the discontinuance rate of the entire chapter 31 Veteran
population, which stands at 65.4 percent. Of these discontinued cases,
92.5 percent were due to the Veteran choosing not to continue in the
program. As of May 13, 2024, VA has 345 VR&E participants with pending
IU applications, with 292 in the evaluation and planning status, and
285 actively participating in a rehabilitation plan.
Closing
VA appreciates Congress' continued support in finding ways to
improve the services and benefits available to transitioning Service
members and Veterans who have challenges preparing for, obtaining, and
maintaining gainful employment. VA remains committed to continuing
collaboration with you and its stakeholders. Mr. Chairman, this
concludes my statement. My colleagues and I would be happy to answer
any questions you or other members of the Subcommittee may have.
Prepared Statement of Marquis Barefield
Chairman Luttrell, Ranking Member Pappas and Members of the
Subcommittee:
Thank you for inviting DAV (Disabled American Veterans) to be a
witness at your hearing titled, ``Does a Total Disability Rating Based
on Individual Unemployability (TDIU) Properly Compensate Today's
Veterans?''
DAV is a congressionally chartered and Department of Veterans
Affairs (VA) accredited veterans service organization. We provide
meaningful claims support free of charge to more than 1 million
veterans, family members, caregivers and survivors. To fulfill our
service mission, DAV directly employs a corps of benefits advisors,
national service officers (NSOs), all of whom are themselves wartime
service-connected disabled veterans, at every VA regional office (VARO)
as well as other VA facilities throughout the Nation, including the
Board of Veterans' Appeals (Board). During 2023, DAV national and
transition service officers interviewed over 300,000 veterans and their
families, and filed more than 200,000 new claims for over 600,000
specific injuries and/or illnesses. Thanks to the great work of our
service officers, those represented by DAV obtained more than $28
billion in earned benefits in 2023.
We are pleased to provide our insight, concerns, and
recommendations as we explore the requirements of TDIU, discuss the
veteran's age and TDIU, compare it the Social Security Administration's
(SSA) Social Security Disability Insurance (SSDI) program and discuss
levels of compensation for TDIU.
Total Disability Rating Based on Individual Unemployability
As we discuss and debate TDIU, how it is defined and applied, we
must remember whom this impacts; service-connected disabled veterans
suffering from mental health disorders such as post traumatic stress
disorder (PTSD) from combat or military sexual trauma, cognitive
disabilities such as traumatic brain injuries (TBI), amputations and
other orthopedic conditions limiting mobility, diseases impacting the
ability to breathe, digest, hear, see, as well as the effects of
cancers, not to mention the overwhelming disruption of life caused by
chronic pain.
For those veterans who are unable to work due to service-connected
disabilities but whose disabilities do not meet the requirements for a
total rating under VA's regular rating schedule criteria, VA has
special provisions for awarding total disability ratings. A total
disability rating for compensation based on TDIU may be assigned where
the schedular rating is less than total, when it is found that the
disabled person is unable to secure or follow a substantially gainful
occupation as a result of a single service-connected disability ratable
at 60 percent or more, or as a result of two or more disabilities,
provided at least one disability is ratable at 40 percent or more, and
there is sufficient additional service-connected disability to bring
the combined rating to 70 percent or more.
Total disability will be considered to exist when there is present
any impairment of mind or body tis sufficient to render it impossible
for the average person to follow a substantially gainful occupation.
Therefore, total disability ratings for compensation may be assigned,
where the schedular rating is less than total, when the veteran is, in
the judgment of the rating agency, unable to secure or follow a
substantially gainful occupation as a result of service-connected
disabilities.
The distinction between total disability on a schedular basis and
TDIU is that total disability on a schedular basis is founded on an
``average person'' standard, as are all regular schedular ratings,
while unemployability ratings are based on the impact of the disability
in the veteran's own circumstances.
Average earning capacity, or average person, is a standard or a
single value used to represent a broad universe of persons. Like an
average, it is approximately the middle position in a data set or
intermediate between the two ends or extremes on a scale. Consequently,
while the concept of average impairment in earning capacity is the
basis underlying the various percentage evaluations provided for given
levels of disability in the rating schedule, unemployability
determinations are not based on average impairment and must consider
the disability as it affects the individual's ability to follow a
substantially gainful occupation in light of his or her attained work
skills and educational background.
Substantially Gainful Occupation
Substantially gainful occupation, found in 38 C.F.R. Sec. 4.16,
has been clarified by the United States Court of Appeals for Veterans
Claims (Court) decision, Ray v. Wilkie, 31 Vet. App. 58 (2019). First,
there is an economic component, which essentially contemplates an
occupation earning more than marginal income (outside of a protected
environment) as determined by the U.S. Department of Commerce as the
poverty threshold for one person. Second, there is a non-economic
component dealing with the individual veteran's ability to follow and
secure employment.
For the second component, attention must be given to: (a) the
veteran's history, education, skill and training, (b) the veteran's
physical ability (both exertional and non-exertional) to perform the
type of activities (e.g., sedentary, light, medium, heavy or very
heavy) required by the occupation at issue, with relevant factors such
as lifting, bending, sitting, standing, walking, climbing, grasping,
typing, reaching, auditory and visual, and (c) whether the veteran has
the mental ability to perform the type of activities required by the
occupation at issue, with relevant factors such as memory,
concentration, and ability to adapt to change, handle work place
stress, get along with coworkers and demonstrate reliability and
productivity.
Marginal Employment
Substantially gainful employment is defined as work that is more
than marginal, and that permits the individual to earn a living wage.
Moore v. Derwinski, 1 Vet. App. 356, 358-59 (1991). The ability to work
only a few hours a day or only sporadically does not qualify as an
ability to engage in substantially gainful employment. See id. Marginal
employment shall generally be deemed to exist when a veteran's earned
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.
VA's Federal Advisory Committee on Disability Compensation was
tasked in the January 6, 2014, VA Response to the Committee's 2012
Biennial Report to conduct a study of the issue of Individual
Unemployability (IU) and make recommendations based on the earnings and
losses study. The Committee expressed concern in the 2016 Biennial
Report that there was no plan developed to study economic loss data. VA
initiated a limited study in 2017 which identified weaknesses with
respect to sample size. VA has engaged contractors for a more robust
study which has not been completed. Analysis is still pending access to
data bases from other Federal agencies. The Committee remains concerned
about the approach being taken.
As an exception to poverty threshold-based marginal employment,
which in turn is an exception to the norm of TDIU usually being awarded
to veterans who are unemployed, facts found marginal employment,
including employment in a protected environment, must be read narrowly
so that it does not utterly supplant the general rule that annual
income, limited by the poverty threshold, is a key criterion for
determining TDIU eligibility. See Rossy v. Shulkin, 29 Vet.App. 142,
144-45 (2017).
In the recent decision of LaBruzza v. McDonough (2024), the Court
held, ``for the purposes of ascertaining the meaning of employment in a
protected environment, the Court concludes that the phrase limits such
employment to lower-income positions that produce earned annual income
that exceeds the poverty threshold. And while the fact-specific nature
of the protected-environment inquiry, as well as institutional
limitations, prevents the Court from setting a bright-line standard for
what constitutes a lower--income position, the extent to which a
veteran's earned annual income exceeds the poverty threshold is clearly
a key regulatory consideration.''
As can be gleaned by the above descriptions and explanations about
substantial gainful employment and marginal employment, the Court has
weighed in often on these requirements of TDIU. However, one area we
have yet to address is the veteran's age, which cannot be considered in
any determination of entitlement to TDIU.
Veteran's Age and TDIU
Although TDIU is based on the effect of disability on the
individual, it does not discriminate on the basis of age. If the total
rating is based on TDIU, it must be determined that the service-
connected disabilities are sufficient to produce unemployability
without regard to advancing age. VA is required to determine, without
regard to age, whether it is the service-connected disability that
renders the veteran unemployable.
Per VA's Fiscal Year 2025 annual budget submission, in September
2023, 377,108 veterans received TDIU, an increase of 933 cases over
September 2022. While TDIU caseload continues to increase at a gradual
rate, the percentage of veterans on the compensation rolls receiving
TDIU compared to total veteran caseload has been decreasing slightly,
from 7.8 percent in September 2017 to 6.8 percent in September 2023.
Although the percentage of veterans receiving TDIU has slightly
decreased and VA regulations preclude considering the veteran's age,
attempts to limit TDIU based on the veteran's age have persisted. For
example, the June 2015 Government Accountability Office (GAO) report,
``Veterans' Disability Benefits: VA Can Better Ensure Unemployability
Decisions Are Well Supported,'' they recommended to develop a plan to
study whether age should be considered when deciding if veterans are
unemployable.
Reports from the Congressional Budget Office (CBO) in November
2013, August 2014 and December 2016, provided options to limit TDIU
based on age and entitlement to additional earned benefits. In the
former administration's 2018 budget, VA proposed to terminate TDIU
ratings for veterans at the age of 62 and cutoff TDIU benefits for any
veteran already in receipt of Social Security benefits.
In the December 2022 CBO report, ``Options for Reducing the
Deficit, 2023 to 2032,'' an option was presented to terminate TDIU
ratings for veterans at age 67 or older, and cutoff TDIU benefits for
any veterans already in receipt of TDIU. This is predicated on the
veteran being in receipt of SSA based on retirement age. Another option
in the report would require that once a veteran meets the SSA
retirement age, all disability benefits would be reduced by 30 percent.
To be clear, total compensation for TDIU is not a retirement
benefit. Many veterans in receipt of TDIU may have not have earned
enough work credits to receive SSA retirement. Therefore, cutting off
benefits due to obtaining the retirement age or age 67, would take TDIU
benefits from veterans with no SSA entitlement or actual retirement
benefits.
Today, many people work well beyond what was once considered normal
retirement age. Typically, VA awards the benefit when disability forces
the veteran to terminate employment. To award TDIU to a veteran age 64
and deny it to a veteran aged 67, for example, would be unfair
discrimination, disparate treatment of veterans similarly situated, and
wholly unjustified from an equitable standpoint.
Age may not be considered a factor in evaluating service-connected
disabilities or in determining entitlement to TDIU as stated in 38
C.F.R. Sec. 4.19. That is why DAV strongly supports H.R. 6362, the
Protecting Benefits for Disabled Veterans Act. This legislation would
codify entitlement to TDIU and include the provisions of 38 C.F.R.
Sec. 4.19, to protect TDIU for all veterans regardless of age. Through
our grassroots efforts, DAV members and supporters sent nearly 11,500
emails to the House of Representatives in support of the Protecting
Benefits for Disabled Veterans Act.
Although VA cannot consider age regarding TDIU, other programs
consider age, such as VA's nonservice-connected pension program and
SSA's SSDI program.
Social Security Disability Insurance and Total Disability Based on
Individual Unemployability
SSDI was established in 1956 as a component of the Old Age,
Survivors and Disability Insurance (OASDI) program. Its primary purpose
is to replace a portion of an insured worker's earnings, should a
medically determinable illness or injury impede his or her ability to
work. For SSDI benefits, an individual must have a sufficient work
history and must be unable to engage in any employment that brings
income in excess of the substantial gainful activity (SGA) threshold,
as a result of one or more medical conditions that is expected to last
12 months or longer, or result in death.
SSDI is an insurance program that replaces a portion of earnings
for an eligible worker whose illness or injury, while not necessarily
caused by a work-related incident, results in an inability to work.
SSDI is one of several Federal programs funded through the Federal
Insurance Contributions Act (FICA) payroll tax and the Self Employment
Contributions Act (SECA) tax to which all workers and employers in
covered occupations (including military personnel) and self-employed
individuals make contributions.
Insurance against disability from any cause is to be distinguished
from compensation for disability from military service. VA compensation
is not an insurance program; it is based on wounds, injuries and
illnesses that are related to active military service.
Age is a factor in determining entitlement to SSDI on the principle
that, where a person is unable to perform his or her customary work,
the effects of advancing age reduces a person's ability to adjust to
other work for which the person has the necessary skills, education,
and physical or mental abilities. The June 2015 GAO report, ``Veterans'
Disability Benefits: VA Can Better Ensure Unemployability Decisions Are
Well Supported,'' proposed SSDI's age restriction. It noted the
potential strengths:
Could better target the intended population--older
veterans might not be likely to work past retirement age.
Benefit costs might be reduced due to the reduction in
payments to older veterans.
The report noted the following challenges:
Some veterans might not have income replacement
available--especially those who had been on TDIU in advance of reaching
retirement age.
Could be unfair to veterans--older individuals might have
the option of working past the retirement age, but older veterans whose
service-connected disabilities stop them from working cannot.
Regulatory provisions preclude VA from considering age. Thus,
contrasting SSDI with TDIU, considering age restrictions, is clearly
not an apples to apples comparison. DAV is firm in our conviction that
age restrictions will negatively impact veterans. We remind Congress
that age must be ignored because compensation is paid for the effects
of service-connected disabilities, not the effects of age.
Disability determinations for SSDI benefits entail a five-step
process. First, an applicant files for benefits with the SSA at the
agency's website, a field office, or through a toll-free phone line.
The responsibility for adjudicating the application then shifts to
medical and vocational experts at state-level Disability Determination
Services (DDS) agencies.
In the previously noted 2015 GAO report, it considered the results
of a mandatory vocational assessment before granting TDIU benefits. It
was noted that not all veterans who claim TDIU do not receive a
vocational assessment. The vocational assessment would address whether
the veteran could be rehabilitated in order to maintain employment. In
addition, rating specialists working on TDIU claims would receive
training in how to interpret the findings from the vocational
assessment. Rating specialists would then be able to use this
assessment, along with the results of medical reports and other
information, to help determine the veteran's ability to engage in work
activities. The report noted only potential strength of such a
requirement:
Could help provide a more complete appraisal of the
veteran's ability to work.
VA has vocational specialists with the Veteran Readiness &
Employment (VR&E) program, so if a vocational component was required,
it would more than likely fall to VR&E. The report also identified
potential challenges as:
Could require VA to expand its vocational rehabilitation
program to address the increase in required assessments.
Could cause delays in benefit decisions.
Rating specialists and vocational rehabilitation
counselors might need to receive additional training on how to assess
the vocational rehabilitation findings.
Could increase the burden on veterans as they would
likely need to submit to an additional assessment.
By adding a new factor to consider, could possibly
increase the subjectivity of claim decision-making, thereby possibly
creating more variation in decisions.
Our experience has showed that when a veteran is denied entry into
a VR&E plan for employment due to their service-connected disabilities,
it has an impact for the veteran to be awarded TDIU. However, we have
concerns over making that a requirement, as this could create an
additional burden on the veteran to obtain a vocational opinion on
their own, which many may not have the means to obtain.
VA's 2025 budget submission indicated that they would be losing
approximately 60 FTE. We believe adding a vocational component would
lengthen the processing time and place an additional burden on VR&E
counselors, even though many have admitted they are currently
overwhelmed.
If the requirements of a vocational expert become mandatory, we
have concerns as the Court does not find that vocational opinions are
equivalent to medical opinions (finding that vocational expertise is
not the same as medical expertise). See Arline v. McDonough 34 Vet.
App. 238 (2021). To take this even farther, the Federal Circuit Court
of Appeals has held that the ultimate determination of whether a
veteran is capable of substantial gainful employment rests with the VA
adjudicator, not a medical examiner. Geib v. Shinseki, 733 F.3d 1350,
1354 (Fed. Cir. 2013). This means that VA can discount any vocational
or medical opinion that could be potentially beneficial for a veteran
seeking TDIU.
Though they are imperfect and have been criticized by the Court and
GAO, we believe the current rules, for the most part, prescribe
consideration of the appropriate factors. These decisions do require
careful examination of the facts and the exercise of well-informed and
well-reasoned judgments. Most veterans prefer to work if they are able
and we believe they should be afforded those opportunities and not be
solely reliant on VA compensation rates.
TDIU Compensation
Currently VA has stated that approximately 5 million veterans are
in receipt of VA compensation and as we noted above, roughly 400,000
veterans are receiving TDIU compensation, which is the same
compensation rate as 100 percent disabled. This means approximately 8
percent are receiving TDIU compensation, which for a single veteran is
$3737.85 a month equaling $44,854.20 a year.
In the fourth quarter of 2023, the U.S. Bureau of Labor Statistics
reported that the national average salary was $59,384.00. The Forbes
Advisor reported that the average annual salary in the United States in
2024 is $59,428.00 with and average hourly rate of $28.34. Based on
these numbers and the 100 percent disability compensation rates for a
single veteran, which is an approximate difference of $15,000 less that
the national average annual salary.
For those veterans that are unable to work due solely to their
service-connected disabilities, they receive compensation that is
demonstrably lower than the national average. TDIU compensation is not
some lottery windfall amount, it is below average and veterans are
required to use this amount for themselves and their families.
We recommend an increase not only in the 100 percent disability
compensation rates, but an adjustment of all rates based on any
potential increased rate for 100 percent. Further, we recommend that
more opportunities for education, vocational training and job placement
be made available for all veterans and specifically those in receipt of
TDIU.
Many veterans have difficulties with the loss of independence and
being forced to deal with the aspects of diseases, wounds and injuries,
medical appointments, treatments, prosthetics and medications. VA is
required to notify a veteran awarded TDIU of the availability of
vocational rehabilitation and offer the veteran counseling services and
the opportunity for evaluation as to whether the achievement of a
vocational goal is feasible.
Although a veteran might have the potential to perform
substantially gainful employment in the future upon successful
completion of vocational rehabilitation training, entry into a program
of vocational rehabilitation, by itself, does not cause a termination
of TDIU benefits. A veteran who undertakes a program of vocational
rehabilitation is not considered ``rehabilitated to the point of
employability'' unless he or she has been ``rendered employable in an
occupation for which a vocational rehabilitation program has been
provided, as noted in 38 C.F.R. Sec. 21.72. Additionally,
participation in an education program does not mean that a veteran is
employable and TIDU cannot be discontinued for that reason.
However, there are provisions that essentially allow for a period
of trial work, in which a TDIU rating cannot be reduced where a veteran
secures and follows a substantially gainful occupation unless the
veteran maintains such an occupation for a period of 12 consecutive
months. See 38 C.F.R. Sec. 3.343(c)(2). We agree that it is desirable
to provide every reasonable opportunity and encouragement for disabled
veterans, including those with very serious handicaps and those found
to be unemployable, to have the ability to return to work.
Mr. Chairman, in closing, we must remember that TDIU impacts those
service-connected disabled veterans suffering from mental health
disorders such as PTSD from combat or military sexual trauma, cognitive
disabilities such as TBIs, amputations and other orthopedic conditions
limiting mobility, diseases impacting the ability to breathe, digest,
hear, see, as well as the effects of cancers, not to mention the
overwhelming disruption of life caused by chronic pain.
DAV believes that improvement can be made to the TDIU process;
however, our conviction remains with the following:
Total disability will be considered to exist when there
is present any impairment of mind or body which is sufficient to render
it impossible for the average person to follow a substantially gainful
occupation.
Unemployability ratings are based on the impact of the
disability in the veteran's own circumstances in light of his or her
attained work skills and educational background.
Total disability compensation for TDIU is not a
retirement benefit.
Age should not be considered a factor in evaluating
service-connected disabilities or in determining entitlement to TDIU.
VA compensation is not an insurance program; It is based
on wounds, injuries and illnesses that are related to active military
service.
Veterans in receipt of total disability compensation
receive substantially less than the national average salary.
Mandatory vocational assessments would create a burden on
the VR&E program and create delays in claims and appeals.
Disabled veterans, including those with very serious
handicaps and those found to be unemployable, deserve to have a
mechanism to return to work.
While we agree that there need to be better paths to employment,
education and training, we must be vigilant in protecting those that
receive a total disability based on individual unemployability due to
the severity of their service-connected disabilities. This concludes my
testimony.
Prepared Statement of Michael Figlioli
Chairman Luttrell, Ranking Member Pappas, and members of the
subcommittee, on behalf of the men and women of the Veterans of Foreign
Wars of the United States (VFW) and its Auxiliary, thank you for the
opportunity to provide our remarks on this important issue.
Total Disability based on Individual Unemployability (TDIU) has
long been a delicate subject of debate. For many, the benefits provided
by the program have been life changing, not only for veterans but for
their family members as well. While some may be quick to focus on costs
and numbers, the underlying core of the discussion is about people.
These are individuals who put themselves in harm's way and were
injured. Some of the wounds are visible and some are not, but because
of their service they are unable to achieve gainful employment.
As we have witnessed for more than 20 years, one of the tragic
consequences of men and women risking their lives is that they do not
always return in the same condition as when they left. Many have had
their lives changed in an instant whether it was due to an improvised
explosive device blast, or toxic exposure to radiation, dioxins, or
herbicides. For those who selflessly served this country but do not
meet the schedular requirements for a 100 percent disability rating and
are left with the insidious effects of war that preclude them from
gainful employment, the Department of Veterans Affairs (VA) can provide
a TDIU rating.
Every process, program, and system has the capacity for improvement
in some form or another. The VFW supports process improvement that
sustains or enhances benefits for those who served their country. We
must be cautious of unintended consequences for those who rely on this
benefit, especially the most vulnerable who depend on this payment for
their very survival.
TDIU Compensation
Of all the discussions over the years about VA benefits, countless
hearings, statistical analyses, Congressional Budget Office
recommendations, and opinions based on fact or perception, TDIU has
been one of the most contentious issues. It has been a difficult
benefit to discuss, likely because this law pushes the boundaries of
statistical and accepted norms. As stated, age is not to be taken into
account when making a decision. Yet, it is always the ``elephant in the
room'' when there are discussions about its parity with the civilian
sector. There is no standard expectation when it comes to the effects
of illness or injury and the impact on a veteran. Some veterans will
become unemployable as their disabilities worsen with age. The VFW
believes that most veterans would prefer to work if capable of doing
so.
The VFW is aware of the cost of this benefit in terms of dollars
and cents. Looking back, we have seen veterans' programs cut when the
financial cost of war disappears from the media's focus. Taking
benefits from veterans was wrong then and it is still wrong today. Any
benefit to which a veteran is entitled by their service to our Nation
is never a waste of money.
Many veterans have recently become beneficiaries of VA disability
compensation due to changes in the law. This has become more apparent
with the passage of the PACT Act. Prior to that there was the expansion
of Blue Water Navy benefits. These veterans who suffered silently due
to the bureaucratic process continued to get older and their
disabilities worsened. They are now unable to work and are entitled to
TDIU as a result. Many are past retirement age and may not have had the
opportunity to pay into the system. Like every other eligible veteran
who may be younger, these older veterans should not have the benefit
taken away.
TDIU / Social Security
Veterans in the TDIU program have service-connected disabilities.
These disabilities prevent them from working or contributing to the
Social Security trust funds like their civilian counterparts in the
workforce. TDIU beneficiaries would be at a significant disadvantage in
compensation provided by Social Security.
The law prohibits VA from taking age into consideration in a claim
for disability benefits. By this statute alone, age is also not a
contributing factor in determining TDIU eligibility, and the VFW
supports this criterion. Health care has advanced significantly,
whether provided by VA or the civilian sector. Americans in general are
living and working longer.
In each new Congress there are proposals submitted by the
Congressional Budget Office to stop TDIU at the age of retirement
because those veterans are no longer employable, which relates to the
age of eligibility for Social Security. It is off-putting that Congress
would suggest that Americans should not be considered part of the
workforce simply due to age. Elder workers are entitled to their earned
wages and associated benefits. Veterans receiving TDIU have documented
service-connected disabilities and should not be penalized for their
inability to work.
The comparison of TDIU to Social Security is the proverbial
``apples and oranges.'' The Social Security safety net is intended to
supplement lost income customarily due to retirement from the workforce
after earning enough work credit at an age determined by that agency.
Many individuals have the opportunity to contribute to a qualifying
retirement plan such as a 401(k) to ensure their financial security in
retirement. TDIU is compensation due to injuries or illness incurred in
service to one's nation. There is no formula or predetermined age to
calculate when a veteran who has the desire to continue working is
unable to do so.
TDIU / VR&E / Earnings Capacity
Everyone's service was different whether it was by occupational
specialty, theater, or period of time. Post-service entitlements are
also different for every eligible claimant. As the world and technology
have evolved over the past several decades, so have the needs of our
force. Older veterans were likely trained in the art of warfare--
artilleryman, infantryman, tanker, engineer. These were the needs in a
post-World War II military, but they were labor-intensive career fields
and employment opportunities may have been limited in our post-war
world.
The modern military has transitioned to a more technically diverse
force. Recruits are now able to receive training in robotics, coding,
aeronautics, and other career fields that did not exist only a
generation ago. Separating or retiring service members are likely to
find similar employment in the civilian sector. The economic
opportunity for better earnings is vastly greater than it was for most
of their predecessors or for individual service members in less
technical or more focused career fields.
A single veteran entitled to TDIU is already at a financial
disadvantage in comparison to the national average salary. Other
indirect compensation such as VA health care and the non-taxable status
of VA compensation contributes to the amount received being comparable
to the national average salary.
VA has offered training in new career fields for those eligible due
to their service-connected disabilities. Since 1985, veterans who
receive TDIU have been eligible for the Veteran Readiness and
Employment (VR&E) program. The Veterans Benefits Administration is
tasked with notifying the administrators of this program about
individuals who may be eligible to participate. VR&E is supposed to
provide a comprehensive evaluation for each veteran in receipt of TDIU
benefits to determine if a new vocation is possible.
While the VFW has consistently supported the policy for vocational
rehabilitation, we have no credible data to indicate that this occurs
consistently and faithfully. We believe it could be greatly beneficial
to incorporate more components of the VR&E program into the TDIU
program, but not without major improvements and added resources. We
have concerns that VR&E may be inadequately staffed or if it even has
the capability to fulfill this goal. As a member of the Independent
Budget Veterans Service Organizations, the VFW has testified for years
about the need for program improvement at VR&E.
The VFW suggests that VA work with stakeholders to better identify
eligible veterans for this critical program. We agree that we must
better collaborate on marketing these benefits for individuals who
receive TDIU and want to continue to work, but might not know how to
navigate the system. This would create more opportunities for veterans
to rehabilitate themselves and eventually not have to rely on TDIU.
There has been great discussion in previous hearings about VA
standard forms. Are they necessary or are they not? Yet, there is no
mention of VR&E benefits in rating decision notices to claimants. This
benefit should be included automatically if a veteran meets the
criteria, the same as when a claimable issue is identified during a
compensation and pension examination but was not included in the
submission. This could be accomplished by simply adding language to the
disability notification letter that states, ``You may be entitled to
additional benefits. If you would like to apply for Veteran Readiness
and Employment benefits, please complete and submit VA 28-1900'' and
include the form.
This approach would allow the veteran to decide on participation in
the program. Some individuals may simply be unable to work. Some may
need to work. The VFW has heard from many veterans who desire to
continue to be a contributing member of the workforce. Many have told
us that it has kept them alive, and if they had been just sitting at
home collecting VA disability compensation they may not have lasted
long. We welcome the opportunity to work with your staffers and our
partners to help veterans who have employment challenges use the
benefits they have earned and remain gainfully employed whenever and
wherever possible.
Conclusion
For the past 125 years, the VFW has been a visible and vocal
advocate for veterans, their family members, and survivors. While TDIU
may be seen by some as too costly, we remind them that this is the true
cost of war. Young men and women are sent to faraway places without
complaint because it is their duty. When they come home, they are
changed. Many have seen things that others would say are best
forgotten. When they are unable to, when they are no longer whole and
too broken to support themselves or their families, it is part of the
collective ``unrepayable'' debt to make sure they have the resources
needed to survive.
This concludes my testimony. I am happy to answer any questions you
may have.
Information Required by Rule XI2(g)(4) of the House of Representatives
Pursuant to Rule XI2(g)(4) of the House of Representatives, the VFW has
not received any Federal grants in Fiscal Year 2024, nor has it
received any Federal grants in the two previous Fiscal Years.
The VFW has not received payments or contracts from any foreign
governments in the current year or preceding two calendar years.
Prepared Statement of Michael Stoddard
Chairman Luttrell, Ranking Member Pappas, and distinguished members
of the Subcommittee for Disability Assistance and Memorial Affairs -
thank you for inviting Wounded Warrior Project (WWP) to submit this
written statement for the record of todays hearing on total disability
rating based on individual unemployability (TDIU). We share your
commitment to ensuring that Department of Veterans Affairs (VA)
benefits continue to support the veterans who earned them through their
service and sacrifice.
For 20 years WWP has been dedicated to our mission to honor and
empower wounded warriors. In addition to our advocacy before Congress,
we offer more than a dozen direct service programs focused on
connection, independence, and wellness in every spectrum of a warrior's
life. These programs span mental, physical, and financial domains to
create a 360-degree model of care and support. This holistic approach
empowers warriors to create a life worth living and helps them build
resilience, coping skills, and peer connection. Our reach extends to
more than 200,000 veterans who are being served in various ways across
the United States.
One of the first and most impactful interactions many warriors will
have with WWP is through our Benefits Services program. Our Benefits
Services program assists injured veterans, Service members, and their
families navigate the often-complex process of filing claims for VA
benefits. For some of these warriors and their families, establishing
service connection for service-related injuries and illnesses is a key
step in establishing financial security and connection to VA health
care after leaving the military. For WWP, ensuring they receive the
benefits they have earned in a manner that honors their service is
fundamental to our mission. Based on thousands of programming
engagements with warriors, our ongoing partnerships with other non-
profit organizations, and data from the largest and most statistically
relevant survey of post-9/11 veterans in the country, WWP is uniquely
equipped and informed to advocate for the needs of the community we
serve.\1\
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\1\ WWP's 2022 Annual Warrior Survey can be viewed at https://
www.woundedwarriorproject.org/mission/annual-warrior-survey.
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Understanding TDIU Ratings
Department of Veterans Affairs regulations define the criteria for
entitlement for individual unemployability (IU) as a VA disability
benefit that allows veterans to be compensated at the 100 percent
disability rate even if their service-connected disabilities do not
combine to a total rating of 100 percent. The associated criteria for
establishing IU require that a veteran be found unable to secure and
follow substantially gainful employment due to their service-connected
disabilities. The case may be referred to the Executive Director for
Disability Compensation for consideration.
Judicial decisions have also shaped the laws that govern TDIU. Ray
v. Wilkie, 31 Vet. App. 58 (2019), provides guidance on the necessary
components to establish the inability to secure or follow a
substantially gainful occupation, which is a determining factor in
establishing entitlement to TDIU. LaBruzza v. McDonough (No. 21-4467
(Vet. App. 2024) clarified that marginal employment can still be
recognized even if a veteran's income exceeds the poverty threshold,
particularly if the employment is in a protected environment, such as a
family business or sheltered workshop. These rulings by the Court of
Appeals for Veterans Claims underscore the nuanced nature of
determining eligibility for TDIU. Providing clear guidance on what
constitutes the inability to secure substantially gainful employment
and recognizing the complexities of marginal employment helps ensure
that veterans receive fair consideration for their unique
circumstances.
As helpful context, TDIU ratings are a meaningful but slowly
declining part of the overall VA disability compensation landscape.
VA's Fiscal Year 2025 Budget Submission reported a gradual increase of
veterans in receipt of TDIU from approximately 350,000 in 2017 to
377,108 veterans in September 2023. But while IU caseload has
increased, it is now only 6.8 percent of the total veteran case load,
which is a decrease from 7.8 percent reported in 2017 \2\. Furthermore,
data shows that TDIU is a multigenerational issue. In September 2017,
CBO estimated that of the roughly 380,000 veterans who were in receipt
of TDIU, less than half (180,000) were over the age of 67 \3\. As such,
WWP has a vested interest in helping ensure that the TDIU benefit can
assist the post-9/11 generation we serve.
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\2\ U.S. DEP'T OF VET. AFFAIRS, FISCAL YEAR 2025 BUDGET SUBMISSION,
Burial and Benefit Programs and Department Administration at VBA-144,
https://www.va.gov/opa/docs/remediation-required/management/fy2025-va-
budget-volume-iii.pdf (last visited June 7, 2024).
\3\ CONG. BUDG. OFF., END VA'S INDIVIDUAL UNEMPLOYABILITY PAYMENTS
TO DISABLED VETERANS AT THE FULL RETIREMENT AGE FOR SOCIAL SECURITY,
available at www.cbo.gov/budget-options/54749 (2024).
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TDIU Ratings in 2024
Whether the current TDIU benefit is an accurate representation of
the average totally impaired veteran's earning capacity in today's
civil occupational environment is a question as diverse as the veteran
community itself. WWP's Annual Warrior Survey provides data to help
understand the different but related issue of whether a TDIU rating can
provide adequate financial support to a totally impaired veteran.
Across several data points, the survey reveals that service-connected
injuries and health problems play a major role in employment among WWP
warriors. Perhaps more significant is what the data shows about the
relationship between financial security and quality of life.
When looking at disability ratings alongside employment status,
more than half (53.7 percent) of those who are unemployed and looking
for work have disability ratings of 100 percent. Among WWP warriors who
are not currently looking for work, 70.3 percent have a disability
rating of 100 percent. Disability rating was also shown to have an
impact on how much financial strain a warrior felt in the last 12
months. Almost two-thirds (64.0 percent) of warriors who reported a 100
percent disability rating also reported that they did not have enough
money to make ends meet in the past year. Warriors who reported full-
time employment were still likely to report that they did not have
enough money to make ends meet in past 12 months (58.1 percent), but
unemployed warriors were generally feeling more financial strain (80.3
percent).
These insights were evaluated further to better understand impact
on a warrior's quality of life. After controlling for demographic
factors, WWP warriors who are employed were found more likely to have
physical or mental health quality of life scores above the median of
the general U.S. population. Similarly, warriors who report financial
strain (as determined by not having enough money to make ends meet)
were found less likely to have physical or mental health quality of
life scores above the median of the general U.S. population.
Unsurprisingly, these results collectively show that that financial
strain negatively impact's warriors' quality of life, employment
positively impacts warriors' quality of life, and a 100 percent
disability rating is most often associated with unemployment and does
not adequately insulate a veteran from feeling financial strain.
As the reasons for financial strain and unemployability are not
easily controlled at the individual level, there are compelling reasons
to invest in supportive services that can address the unique needs of
each veteran. Long-term, multilevel interventions (individual-, system-
, and community-level) are the solution. Certain insights may be
helpful in this context:
Returning to work: WWP has worked with warriors suffering from
significant disabilities and receiving TDIU. The financial relief that
TDIU can provide helps warriors focus on taking care of their treatment
needs. For others, TDIU presents questions about how to manage their
future. WWP works with warriors who seek counsel about how to pursue
work (both full time and part time) in consideration of TDIU. One more
common example is a warrior with mental health challenges who seeks
gainful employment to help with feelings of isolation and being an
unproductive member of their community. The warrior here becomes
concerned about the support in place to help them reintegrate into
employment and the financial impact it will have on meeting financial
obligations. Our experience has taught us that veterans would benefit
from clearer communication about what returning to work - even in a
limited capacity - means for the TDIU benefit, and what services are
available to help manage that transition.
Modernizing schedular disability ratings: TDIU helps veterans reach
a 100 percent rating when they would otherwise face unemployability
with a rating of less than 100 percent. Making the case for a TDIU can
be challenging however, and as noted above, some veterans who have
successfully advocated for a TDIU will later find the ability and
desire to return to work after growing accustomed to the financial
cushion that TDIU provides. One path to providing better outcomes for
many will be to continue efforts to modernize VA's Schedule for Rating
Disabilities (VASRD) to ensure that assigned schedular ratings are
closely reflective of the true impact of service-connected conditions
on a veterans' ability to earn a living.
The last comprehensive update of the VASRD was completed in 1945.
Though numerous amendments have been added since that time, a formal
Program Management Plan to completely revise and update the VASRD under
14 body systems was implemented by VA in October 2009. To ensure the
VASRD remained current, a provision was made to begin an ongoing review
and update of the PMP beginning in March 2017. Since 2017, VA has been
focused on the ongoing effort in research and rulemaking to update the
VASRD to ensure the provisions accurately reflect the average
impairment in earning capacities resulting from disease or injuries
related to military service. To be clear, this is distinct from
congressionally backed efforts to adjust disability compensation to
reflect increased costs of living. WWP encourages further effort in
this pursuit with an eye toward bringing veterans closer to 100 percent
as warranted so that the gap between schedular disability ratings and
TDIU becomes narrower.
VA's TDIU modernization efforts: In 2014, the Secretary of Veterans
Affairs tasked the Advisory Committee on Disability Compensation (ACDC)
to conduct a study of the issue of TDIU and make recommendations based
on earnings-and-loss studies. In its most recent 2022 Biennial Report,
the ACDC indicated that VA completed research in 2017 that would help
its analysis. The ACDC further indicated that ``it is unable to provide
the Secretary with appropriate recommendations to modernize the TDIU
program if the [2017 research] acquired by VA is not shared with the
[ACDC], nor the public.'' In its response to the ACDC's request for the
2017 research, VA stated ``internal information on TDIU stemming from
the [ACDC]'s 2014 recommendation is now dated. As noted in the response
to Recommendation 2.1, VA is not currently engaged in TDIU
modernization efforts. As such, the content of this dated report is
moot.'' WWP encourages more work to be done between all stakeholders to
make informed decisions about how TDIU may be modified to better meet
veterans' needs.
TDIU & Relationship with Social Security
Since VA does not consider a veteran's age when making TDIU
eligibility determinations, veterans may be granted or continue to
receive TDIU benefits after they have reached the Social Security full
retirement age, which is currently 67 years old. As a result, veterans
may receive both TDIU and Social Security retirement benefits
concurrently. Of note, TDIU provides additional disability compensation
for veterans who cannot maintain substantially gainful employment due
to a service-connected condition, while Social Security benefits
provide income for Americans who have reached retirement age, the
amount of which is based on the taxable income they earned during their
working careers. Clearly, these are two different programs, with
different eligibility criteria, established for different reasons.
In the past, proposals have been made to end TDIU payments to
veterans who have reached Social Security retirement age in an effort
to bring down Federal spending. In its 2022 publication, Options for
Reducing the Deficit, 2023 to 2032, the Congressional Budget Office
(CBO) asserted that the Federal Government could save $47.1 billion
from 2023 to 2032 by ending TDIU payments to all veteran recipients
over the age of 67, while $9.2 billion could be saved over the same
time period by grandfathering current TDIU recipients and ending TDIU
payments to all future veteran recipients at age 67.\4\
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\4\ CONG. BUDG. OFF., END VA'S INDIVIDUAL UNEMPLOYABILITY PAYMENTS
TO DISABLED VETERANS AT THE FULL RETIREMENT AGE FOR SOCIAL SECURITY,
available at www.cbo.gov/budget-options/54749 (2024)
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Although no explanation for these proposals is given, one may infer
an assumption by CBO that all veterans will begin collecting Social
Security benefits at age 67, making TDIU payments unnecessary. WWP
believes that this assumption fails to consider certain important
factors. To begin, veterans who suffer disabling injuries that prevent
them from working at a young age may rely on TDIU as their primary
income for almost their entire adult lives. Since VA disability
compensation, including TDIU, is not taxable, they may not qualify for
Social Security retirement payments at age 67, or the payment they do
qualify for would only be a small fraction of what an individual
working through retirement would otherwise receive. In both instances,
this would create a significant income gap for these veterans in their
advancing age, seriously threatening their financial wellness. For this
reason, WWP strongly opposes proposals to end or reduce TDIU payments
for veterans once they reach Social Security retirement age.
TDIU & Veteran Readiness and Employment
In addition to our work assisting veterans with disability
compensation advocacy, WWP is committed to helping veterans seamlessly
transition back into the civilian workforce. In the context of TDIU,
WWP helps educate veterans about VA services counsel about how
employment can impact other VA care and benefits. VA programs provide
personalized career counseling, vocational training, and job placement
assistance tailored to each veteran's individual needs. Addressing
skill gaps and offering support services, such as resume writing,
interview preparation, and technical training that enhance a veteran's
employability and facilitates securing a job that provides more than
marginal income.
Among VA's most notable occupational training programs is Veteran
Readiness and Employment (VR&E). This program provides job training,
employment, resume development, and job-seeking skills coaching for
veterans whose service-connected disabilities make it hard to prepare
for, obtain, or maintain employment. A meaningful number of WWP
warriors - one in five (20.7 percent) - have used, or are using, the
VR&E program.
In many instances, WWP will inform warriors about the opportunities
provided by VR&E before pursuing a TDIU rating. For those who
successfully pursue a VR&E opportunity, the program can provide
tremendous returns through five distinct support-and-service tracks
designed to evaluate and improve a veteran's ability to achieve his or
her vocational goal; provide services to qualify for suitable
employment; enable a veteran to achieve maximum independence in daily
living, and enable a veteran to become employed in a suitable
occupation and to maintain suitable employment. WWP supports using the
VR&E program as a pathway to long-term employment for disabled
veterans. However, in situations where a warrior is unfortunately
denied VR&E services, a comprehensive VR&E evaluation can still serve a
crucial purpose. By thoroughly documenting the veteran's limitations
and employability challenges, a strong foundation is laid for
establishing entitlement to TDIU benefits.
Remove VR&E Delimiting Date
There are opportunities to drive more positive outcomes for VR&E.
First, the program can be made available to all deserving veterans.
Under current regulations, a veteran is only eligible for VR&E for 12
years from the date of their military discharge or the date they
received a compensable disability evaluation.\5\ The regulations do not
consider whether a veteran's condition deteriorates after the initial
rating or whether additional service-connected conditions have been
recognized.
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\5\ 38 CFR Sec. 21.41.
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This issue was partially addressed by the enactment of the Johnny
Isakson and David P. Roe, M.D. Veterans Health Care and Benefits
Improvement Act of 2020 (P.L. 116-315 Sec. 1025), which removed this
delimiting date for all veterans who were discharged after January 1,
2013. To bring parity across all generations of service, WWP asks that
the 12-year delimiting date be removed for all veterans. VA already has
the authority to waive the 12-year rule on a case-by-case basis if the
veteran is determined to have a ``serious employment handicap.'' \6\
However, the standards used to make that determination are not clear
and, without specific guidance to follow, a Vocational Rehabilitation
Counselor (VRC) is ultimately left to make a subjective decision
whether to grant the veteran eligibility to the program. Wider and more
predictable participation should be the goal. Congress can help by
removing the delimiting date for VR&E eligibility for all veterans,
regardless of discharge date, to ensure maximum utilization of this
important employment program.
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\6\ 38 U.S.C. Sec. 3103(c).
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Ease Eligibility for VR&E for Veterans with TDIU
Another avenue to improving VR&E is to ease access for veterans who
have been found unable to secure and follow substantially gainful
employment due to their service-connected disabilities - those veterans
with TDIU ratings. As the findings needed to establish TDIU generally
exceed the eligibility criteria for VR&E, our focus shifts to the
benefit of making services easier to find and use. By creating a
smoother system of referral and eligibility for VR&E for veterans with
TDIU ratings, these individuals can receive the comprehensive support
they need to transition into the workforce, even if their initial
evaluation deems them ineligible due to the severity of their
disabilities.
Create a Step-Down from TDIU
Wounded Warrior Project recognizes and understands the importance
of reintegrating veterans on TDIU into the workforce and helping them
achieve substantial gainful employment and financial independence. As
previously discussed, Veterans often approach WWP with a desire to
return to work and concerns about how related decisions can impact
their service-connected disability ratings, including TDIU. Questions
about what will happen if work proves to be too difficult to maintain
or the fallout from struggling to find a steady employer are all valid
concerns, especially when considering the financial backstop that TDIU
has provided for these veterans as they recover from significant
injuries and illnesses.
One method to ease concerns can be creating a steady glidepath off
TDIU when substantially gainful employment is assumed. A starting point
could be to review the overall effectiveness of reducing a veteran's
overall combined evaluation from TDIU (100 percent) to their original
overall combined evaluation after securing substantially gainful
employment for a period of 12 consecutive months. By studying this
issue closely, we can determine the most appropriate steps to ensure
veterans on TDIU have the support they need to successfully obtain and
maintain gainful employment by removing financial barriers that may
inhibit them from taking the earliest steps back into the workforce.
VR&E Support Track for Federal Employment
Veterans with a service-connected disability have shown a desire to
continue their service to their community by seeking to work in the
public sector. In 2023, 31.4 percent of employed veterans who had a
service-connected disability worked in Federal, State, or local
government compared to 20 percent of veterans with no disability and
12.5 percent of nonveterans. Nineteen percent of employed, service-
connected veterans worked for the Federal Government compared to only
7.9 percent of veterans with no disability and 2.2 percent of
nonveterans.\7\ Despite this, many more veterans who seek Federal
employment are stifled by an overly cumbersome application process.
Even while utilizing the 5-& 10-point veteran preference and use of the
Schedule A Hiring Authority, many are denied jobs before they are
afforded the opportunity to have an in-person interview. VR&E should
consider creating a new track that assists unemployed and underemployed
veterans with the resources and direction they need to be placed in
Federal employment.
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\7\ News Release, U.S. Bureau of Labor Stat., Employment Situation
of Veterans Summary (Mar. 2024), available at https://www.bls.gov/
news.release/pdf/vet.pdf.
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VR&E Resource Hubs
Current VR&E staffing initiatives are crucial in supporting
veterans' needs. Staff training and resources are not uniform around
the country and as a result, the same opportunities are not available
to all veterans seeking VR&E support. WWP recommends exploring
solutions to help ensure that all veterans, regardless of where they
live and access services, have equal opportunity to leverage VR&E
resources in their pursuit of long-term employment. The Veterans Health
Administration (VHA) has found success utilizing Clinical Resource Hubs
(CRH) to reduce gaps in services. These are Veteran Integrated Service
Network (VISN)-owned and--governed programs that provide support to
increase access to VHA clinical services for veterans when local
facilities have gaps in care or service capabilities. Leveraging the
power of telehealth, CRHs provide care to Veterans at their local VA
health care facilities through telehealth technology or in-person
visits. When paired with telehealth technology CRHs allow Veterans to
connect with distant primary care, mental health, and specialty care
teams to improve access to health care. If the CRH model can be adapted
to VR&E, veterans stand to benefit from increased access to service and
potentially lower wait times for services that are in demand by not
uniformly available across the country.
CONCLUSION
Wounded Warrior Project thanks the House Committees on Veterans'
Affairs Subcommittee on Disability Assistance and Memorial Affairs, its
distinguished members, and all who have contributed to a robust
discussion of TDIU. WWP stands by as your partner in meeting the needs
of all who served - and all who support them. We are thankful for the
invitation to submit this statement for record and stand ready to
assist when needed on these issues and any others that may arise.
Statements for the Record
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Prepared Statement of National Organization of Veterans' Advocates,
Inc.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Prepared Statement of Paralyzed Veterans of America
Chairman Luttrell, Ranking Member Pappas, and members of the
subcommittee, Paralyzed Veterans of America (PVA), would like to thank
you for the opportunity to submit our views today on Total Disability
Ratings based on Individual Unemployability (TDIU). No group of
veterans understands the full scope of benefits and care provided by
the Department of Veterans Affairs (VA) better than PVA members--
veterans who have incurred a spinal cord injury or disorder (SCI/D).
Disabled veterans bring important perspectives to the workplace.
However, veterans' success often depends on whether they have access to
proper employment services and supports, which are available both
inside and outside of the VA. In order to understand the role of TDIU
in supporting disabled veterans, the subcommittee must consider these
services and supports and whether they are properly meeting veterans'
needs.
A PVA National Service Officer (NSO) recently assisted a veteran in
receiving TDIU. TDIU is a supplemental program for veterans with
combined VA disability ratings that do not equal 100 percent but which
impede their ability to maintain meaningful employment. To qualify for
TDIU, a veteran must have one service-connected rating of 60 percent or
higher or a combined rating of 70 percent with one condition rated at
40 percent or more.
The veteran had been a brick mason most of his adult life, but due
to his service-connected disabilities, he was unable to continue
performing manual labor. This veteran had applied for and been accepted
into the Veteran Readiness and Employment (VR&E) program; however, his
counselor determined that not only did his disabilities prevent him
from manual labor, but he also was unable to sit for long periods of
time.
Clearly, the veteran was eager to find alternative employment, as
evidenced by his application for VR&E, but his service-connected
disabilities were too significant to find employment that met his
needs, and TDIU was his only option. Service-connected disabilities
often worsen over time, not always with an increased rating decision.
When veterans struggle to work due to their disabilities, they put
themselves and others at risk due to their limitations. After
confirmation from a medical professional, the veteran was awarded TDIU.
When discussing disabilities and how they impact a veteran's
ability to gain employment, we must consider both visible and invisible
disabilities. Treatment for conditions which may not physically
manifest, such as mental health issues or some chronic illnesses, may
require extended periods of stabilization or may be recurring, adding
complications to a veteran's employment stability. Often, TDIU might be
the most beneficial or even the only option for veterans struggling
with periods of health-related hardship and it is critical in helping
them remain independent and financially secure.
Employment Participation for Veterans with Disabilities
Some of the most frequently awarded service-connected disabilities,
per the VA Annual Benefits Report of 2023, are ratings for issues in
the knees, the back, or the arms. A smaller percentage of new claims
are persistent migraines and post-traumatic stress disorder (PTSD).\1\
Each of these prevalent disabilities could significantly impact a
veteran's ability to execute the necessary functions of their job.
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\1\ Veterans Benefits Administration, Annual Benefits Report,
Compensation, Fiscal Year 2023.
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In data from 2023, published by the Department of Labor's Veterans'
Employment and Training Service (DOL VETS), of an estimated 17.8
million veterans living in the U.S., about 8.6 million (48 percent) are
in the labor force. Of that 8.6 million, approximately 2.6 million
veterans have a service-connected disability rating. Of that 2.6
million, 991,000 identify as a person with a non-service-connected
disability. An estimated 500,000 disabled veterans in the labor force
report having a service-connected disability rating of 30-50 percent,
and 1.3 million report a rating of 60 percent or greater.\2\
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\2\ Service-Connected Disabled Veterans and Veterans with a
Disability in the Labor Force, 20023.
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The current veteran unemployment rate is around 3.2 percent, a
figure that has remained relatively constant this year. But looking at
the unemployment rate for disabled veterans, that number jumps to 5.5
percent and is significantly higher for severely disabled veterans.
Little data exists analyzing the unemployment rates of veterans with
SCI/D; however, the National Spinal Cord Injury Statistical Center
created a prospective longitudinal multicenter study on the
demographics of people with SCI, and they estimated that in 2015, only
18 percent of people with an SCI were employed a year out from their
injury. Over time, people with SCI tend to get more comfortable with
their injury, and they better understand what they are capable of, and
at 30 years post-injury, upwards of 30 percent of them are employed.\3\
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\3\ Traumatic Spinal Cord Injury Facts and Figures at a Glance,
NSCISC, 2024.
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While unemployment has been a valuable tool in tracking the
employment landscape for veterans it is important to consider that the
data provided by the Bureau of Labor Statistics (BLS) is based off of a
sample size of 10,000 people whom they follow for a year and an unknown
portion of that group is identified as veterans or disabled veterans.
Also, BLS uses several metrics to analyze the data they provide; but
the people they track are actively engaged with the workforce. Because
it ignores the number of veterans who are not engaged with the
workforce, it results in a misrepresentation of the disabled veteran
employment landscape. A more appropriate representation would be to
examine workforce participation rates by demographics, such as disabled
veteran status, to see how many disabled veterans are unemployed verses
not engaged with the workforce system.
Increased Resources for Veteran Readiness & Employment (VR&E)
The VR&E Program within the VA plays a critical role in assisting
disabled veterans in finding appropriate employment that will not
exacerbate their service-connected disability. Unfortunately, a
significant amount of misinformation exists around the program, and
many veterans do not understand that a VR&E counselor, or VRC, is
trained to find the most suitable job for veterans with disabilities.
Historically it has been proposed that VR&E might be in a position
to help veterans applying for TDIU find appropriate employment that
meets the needs of applicants; however, not everyone applying for TDIU
will be able to maintain employment due to their disability. For
veterans with significant employment barriers due to their service-
connected disabilities, a VRC may not find suitable employment, and if
a medical professional confirms a veteran's inability to work, TDIU
should be awarded. VR&E applications have increased dramatically (40
percent) since the passage of the Honoring our PACT Act (P.L. 117-168)
which fuels a need for more staff to properly manage these cases.
If VR&E played an increased role in the assessment of TDIU
eligibility, it would require additional resources and staff. Also,
Congress should prioritize the elimination of the delimiting date for
the program. Currently, a VRC can use their professional expertise to
assess if a veteran who is past the 12-year eligibility date should be
accepted into the program. A greater number of veterans would be
eligible for the program if the delimiting date were removed, which
would likely result in more positive outcomes from an already
successful program.
In the Independent Budget's (IB) recommendations for VA's budget
for fiscal years 2025 and 2026, the IB veterans service organizations
(VSO) recommended an increase of $46 million to improve the performance
of the VR&E program. Several recommendations were made that could help
VR&E be better positioned to assist in the determination of TDIU
eligibility. Current funding levels address the suggested staffing
ratio of 1:125 (counselor to clients), but the IB VSOs suggest funding
the program to a 1:120 ratio to increase timeliness and support for
disabled veterans. The IB also suggested that VR&E hire an additional
300 full-time employees, which would increase counselor capacity and
decrease the administrative burden they face.\4\ If TDIU consideration
was added to the duties of a VRC, the recommended funding would likely
need to be increased.
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\4\ The Independent Budget, Fiscal Years 2025 & 2026 for the
Department of Veterans Affairs, 2024.
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In some regional offices, staffing shortages have led to longer
wait times for veterans. When counselors leave, the remaining staff are
tasked to manage those cases. That makes it very difficult for a VRC to
have a manageable bandwidth that allows them to make thoughtful
decisions or plans for the veterans they serve. Increased funding and
expansion of staffing for VR&E would allow for appropriate engagement
for potential TDIU eligible veterans to find meaningful, and
appropriate employment despite their service-connected disabilities.
Workplace Accommodations Improve Access to Employment Opportunities
For other employment supports and services, we cannot discount the
need for increased awareness and understanding of appropriate workplace
accommodations. Under the Americans with Disabilities Act (ADA), State
and local government and private employers are required under Federal
law to make reasonable accommodations for employees with disabilities.
A reasonable accommodation is a change to the application or hiring
process, to the job, or to the way the job is performed, or the
environment, for a person with a disability.
Federal law requires that employers offer reasonable
accommodations; however, more education is needed to guarantee
employers understand what is expected of them regarding accommodations.
Many employers believe that hiring a disabled veteran and making
accommodations for them will be too costly, but data overwhelmingly
shows that investing in people with disabilities, veteran or civilian,
often pays big dividends to the company.
The Job Accommodation Network, an employment consultant site funded
by the DOL, published data about the cost of workplace accommodations.
Nearly half (49 percent) of employers who provided reasonable
accommodations reported that it cost nothing to provide them, another
43 percent reported the average cost of accommodations was around $300,
and only 7 percent reported that accommodations provided incurred an
ongoing annual cost.\5\ Other benefits seen by implementing workplace
accommodations were increased worker productivity and retention,
increased company morale, and decreased costs associated with training
a new employee.
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\5\ Costs and Benefits of Accommodation, Low-Cost High Impact, Job
Accommodation Network, April 2024.
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Understanding reasonable accommodations for veterans with
disabilities and expecting these accommodations to be provided by
employers across the country is another way to help people with
disabilities find appropriate employment opportunities.
One of PVA's NSOs was on TDIU prior to his current employment.
Mathew joined the military in 2010 at 29 years old. He had previously
been a quality logistics manager for an oil production company but
during the recession he was laid off from his position. Living in rural
Oklahoma meant that employment opportunities that would sustain his
family were difficult to find, so he joined the military.
After 5 years of service, Mathew experienced health concerns
coupled with increased family responsibilities, and he was discharged
in May 2015. Shortly after separation, in June 2016, Mathew was
diagnosed with multiple sclerosis (MS). Several of the medical issues
he experienced toward the end of his service were likely early symptoms
of MS, and because he was diagnosed within the 7-year presumptive
window, he was granted 30 percent for his MS. His health continued to
decline, which led to secondary issues such as chronic migraines and
vertigo, increasing his disability rating to 90 percent.
Mathew found work at a grocery store as an assistant manager which
combined with his disability compensation allowed him to provide for
his family. One day while taking the trash out he was hit with a strong
case of vertigo and one of his coworkers found him lying on the ground
next to the dumpster. His employer suggested Mathew take some time to
get his health under control.
With worsening conditions, Mathew quickly realized finding suitable
employment was going to be a struggle, and he was encouraged by his
medical provider to apply for TDIU. The benefit was granted which
allowed him to provide for his family, but he says that was the lowest
point of his life. Mathew was uncomfortable receiving TDIU; he recalled
praying for death, which he said would be better than sitting around
and doing nothing.
Mathew's MS continued to progress, and eventually, he was diagnosed
with drop foot, which increased his rating from 90 to 100 percent.
Because of the increased rating, Mathew received a letter from the VA
informing him that he was no longer eligible for TDIU but that he would
receive the same amount of compensation. Like most veterans, Mathew had
questions about this change, and he headed to his local VA office to
get clarity.
Upon arrival at the VA, Mathew stopped at the local PVA office,
where he already knew most of the staff. After addressing his
questions, they informed him that PVA was hiring an NSO, and he was
encouraged to apply. Mathew responded with shock, and he told the staff
that they did not want to hire a guy like him. He was trying to get his
MS under control and couldn't guarantee that he could work full-time in
the office as needed. The PVA staff informed Mathew that they fully
understood the complications of his MS and that they would still like
him to apply. They also assured him that appropriate accommodations for
his disabilities would be made and that they would assist with his
success in the role.
Mathew was hired and has been working as a PVA NSO since then, and
he has become an invaluable resource for veterans living with MS. Many
veterans likely share a similar experience when it comes to the use of
TDIU, and quickly learn that it can be the resource which allows a
veteran to improve their health and well-being without fear of
financial hardship, and once they are in a stable position they are
better prepared and equipped to reenter the labor market.
Other Government Programs to Support Disabled Veteran Employment
Several Federal programs exist beyond the VA to help disabled
veterans find meaningful employment. DOL VETS has been given the
responsibility of helping veterans, service members, and military
spouses to reach their full potential in the workplace. DOL oversees
the Jobs for Veterans State Grants (JVSG) Program and programs such as
Section 503 and the Vietnam Era Veterans Readjustment Assistance Act
(VEVRAA), which urge Federal contractors to recruit and higher veterans
with disabilities. Another office within DOL that addresses employment
challenges experienced by disabled veterans is the Office of Disability
Employment Policy (ODEP), whose mission is to ``develop and influence
policies and practices that increase the number and quality of
employment opportunities for people with disabilities.'' \6\
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\6\ Office of Disability Employment Policy (ODEP), Department of
Labor.
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When discussing DOL, it is critical to highlight the Workforce
Innovation and Opportunity Act (WIOA), which was signed into law in
2014. WIOA was intended to ``help people access employment, education,
training, and support services to succeed in the labor market and to
match employers with the skilled workers they need to compete.'' \7\
Recently, the House passed H.R. 6655, the Stronger Workforce Innovation
and Opportunity Act, which would reauthorize the funding through 2030
to help close the national skills gap and provide increased
accountability in State workforce systems that help workers obtain
gainful employment.
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\7\ Workforce Innovation and Opportunity Act (WIOA), Department of
Labor.
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Across the country are American Job Centers (AJC) which are
intended to provide a suite of assistance to job seekers such as
training referrals, career counseling, and other employment-related
supports. Two critical support roles within AJCs are Disabled Veteran's
Outreach Program (DVOP) Specialists and Local Veterans' Employment
Representatives (LVER). A DVOP provides individualized employment
services and LVERs conduct outreach to local businesses and other
employers to advocate for the hiring of veterans. LVERs are expected to
educate employers on the practical implementation of appropriate
workplace accommodations and to ensure the work environment they
provide is suitable for a person with a disability. In 2002, the Jobs
for Veterans Act required that priority of service be given to targeted
veterans in workforce programs funded by DOL. Additionally, for
employment within the Federal Government, veteran's hiring preference
is afforded to eligible veterans seeking Federal employment.
There is a robust network of services and support afforded to
disabled veterans to help them find meaningful and lasting employment
that allows them to live an independent life. There are federally
funded programs, State funded programs, and other resources at the
local level; however, despite all of these services, not all veterans
will find suitable employment. At times, service-connected disabilities
worsen and require a veteran to take time for themselves to focus on
their health, which is why TDIU is such a vital program for our
nations' veterans.
Although AJCs have been tasked with the responsibility of assisting
disabled veterans find suitable employment, fewer resources have been
allocated for them to execute their mission. Since 2003, Federal
dollars for AJCs has decreased 10 percent. If inflation were
considered, it would be nearly 50 percent. Since 2003, there are 1,300
fewer job centers across the country, leaving 31 percent of the
country, more than 25 million Americans, without those employment
resources. It is also critical to stress that DOL's data on
participants earnings when they leave the AJC equates to no more than a
fast-food worker. Despite the various programs and resources intended
to support disabled veteran's in finding employment, they are still
struggling to find meaningful and financially secure employment.
Social Security Programming Offers an Example
The Social Security Administration (SSA) oversees the Federal
benefits program for retirement benefits and disability income to
qualified individuals and their dependents. The amount of the benefit
is awarded based on your average indexed monthly earnings from your 35
highest-earnings employment years; therefore, it is different for every
beneficiary. If someone is injured and unable to work, they might be
eligible for Social Security Disability Insurance (SSDI).
It is critical to acknowledge that SSDI is an insurance program.
Employees pay into Social Security through a U.S. Federal payroll tax
known as the Federal Insurance Contributions Act (FICA). FICA helps
fund Social Security and Medicare programs, together they provide
benefits for retirees, people with disabilities, dependents, and
survivors. SSDI is not an entitlement program. It is a payment based of
an individual's previous earning capacity and their contributions to
Social Security. It is important to remember that this is a critical
benefit for veterans with non-service-connected disabilities, because
it may be their only source of income they can rely on.
Another beneficial program offered to SSDI recipients is the Ticket
to Work program, which allows beneficiaries to test their ability to
work for at least 9 months. During this trial period, a beneficiary can
continue to receive benefits regardless of their earnings, as long as
they report the work activity and it meets the rules and standards set
out by the SSA. Ticket to Work is a free and voluntary program that
supports career development for SSDI recipients and assists them in
moving toward financial independence while connecting them with
services and supports needed to succeed in the workforce, free from the
fears of economic hardship.
While TDIU recipients are able to engage in marginal employment,
they are unable to earn more than the Federal poverty level. In 2024,
the poverty level, set by the Department of Commerce, is around $15,000
annually, or $1,250 a month. Many veterans are unaware that they are
able to attempt to reenter the workforce and fear the loss of their
benefits. It is critical to remember that veterans receiving TDIU are
struggling with their physical and/or mental health. The VA should
improve outreach and awareness of the limits and allowances offered
within the program.
The Ticket to Work program is not perfect, however if the VA were
to offer something similar to this program to veterans attempting to
reenter the labor market while ensuring their financial security, more
veterans might be willing to engage with appropriate employment once
they have improved their overall health and well-being. A program like
this could offer an off ramp for veterans who think they are ready to
return to work but have anxieties about their financial stability. This
could be particularly impactful for veterans in rural areas hit hardest
by inflation and rising costs.
Increased Oversight of Employment Support Programs
As previously mentioned, there are numerous federally funded
programs that aim to get disabled veterans into appropriate employment.
Congress needs to conduct efficient and targeted oversight to ensure
that these programs are working to the benefit of the veterans they aim
to serve. Improving communication and coordination would have a
positive impact on all veterans looking for suitable employment. This
is especially true for disabled veterans whose service-connected
disabilities may prevent them from holding many jobs that would allow
for financial security.
If all of the various employment support programs worked together
to ensure that disabled veterans were able to find gainful and
fulfilling employment, we would likely see decreased participation in
the TDIU program. We urge Congress to focus on ensuring that disabled
veterans have access to the benefits that they need while they focus on
their health, and the opportunity to access robust services and
supports to help them return to the workforce if their situation allows
them to do so.
Thank you again for allowing PVA to offer its perspective on the
TDIU program.
Information Required by Rule XI 2(g) of the House of Representatives
Pursuant to Rule XI 2(g) of the House of Representatives, the
following information is provided regarding Federal grants and
contracts.
Fiscal Year 2023
Department of Veterans Affairs, Office of National Veterans Sports
Programs & Special Events----Grant to support rehabilitation sports
activities--$479,000.
Fiscal Year 2022
Department of Veterans Affairs, Office of National Veterans Sports
Programs & Special Events----Grant to support rehabilitation sports
activities--$ 437,745.
Disclosure of Foreign Payments
Paralyzed Veterans of America is largely supported by donations
from the general public. However, in some very rare cases we receive
direct donations from foreign nationals. In addition, we receive
funding from corporations and foundations which in some cases are U.S.
subsidiaries of non-U.S. companies.
Prepared Statement of James Vollman
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Prepared Statement of Georgetown University Center on Education and the
Workforce
Summary
The Total Disability based on Individual Unemployability (TDIU)
veteran compensation program provides a single flat payment to veterans
experiencing total disability connected with their service. We suggest
modifying this compensation by connecting the veteran's MOS to the
civilian equivalent to better reflect what disabled veterans could have
earned in the civilian labor force.
The attached earnings matrix details median civilian earnings
(including the earnings of working veterans) by 3 levels of education
(high school, middle skills, and a bachelor's degree or higher) within
22 major occupational groups. This approach documents that in 30 of 66
possible cases, the current TDIU payment is less than the lost
potential earnings in the civilian occupation.
We further extend this analysis to account for career advancement.
By splitting the workforce into age groups, we demonstrate that in 40
of the 66 cases, the median earnings of older workers (ages 45-54)
exceed the current TDIU payment. This finding suggests that earnings
growth should be considered when contemplating modified compensation.
We propose a simple adjustment to account for earnings growth, which is
to increase the TDIU payment annually by 1 percent above the COLA. This
approach would raise the monthly payment from $3,737 for a 25-year-old
to $4,840 for a 50-year-old.
Additional considerations
The approach of linking the MOS to the equivalent civilian
occupation is limited by the degree to which each MOS can be linked. We
believe that additional research is needed to determine whether a
disproportionate share of disabilities occur among veterans whose MOS
cannot be linked to a civilian occupation. We also suggest that
civilian legal cases can provide guidance on disability compensation.
Finally, we hold that the current payment should be treated as a floor
for compensation. The current monthly base payment amount of $3,737--
equivalent to $56,000 pretax annual earnings--may be reasonable for an
individual, but may not be adequate to support a veteran's household.
Discussion
Approach: We suggest adjusting compensation to account for lost
earnings using the following approach: we assume that the service
person, if not disabled, would have entered the civilian labor force
and worked full-time full-year (FTFY) in an occupation aligned to their
military occupational specialty (MOS). Had the veteran not been
disabled, they would have garnered similar earnings to those observed
for all 25-to-64-year-old FTFY workers in that occupation in the
civilian labor force.\1\ We assume that the MOS is mappable to the
civilian occupation via efforts such as COOL, which the DOD uses to
assist reentering veterans.
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\1\ For veterans who claim TDIU benefits after working in the
civilian labor force, their prior civilian occupation and earnings can
be used directly (with an earnings growth adjustment based on their
age) instead of mapping their MOS.
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To further explore this approach, we have created a matrix of
monthly median earnings by 22 major occupations and by 3 education
levels: high school diploma, middle skills (some college no degree,
which implicitly includes certificates, and associate's degrees), and
bachelor's degree or higher. This matrix (Table 1 of the attached) is
populated by median earnings (66 medians); it is possible to be more
granular, but we are not certain that more specificity will be
informative as we believe that roughly 50 percent of the MOS categories
will not meaningfully map to a civilian equivalent.
For the purposes of comparison, we adjust the current monthly TDIU
payment of $3,737 upwards to $4,709 to reflect that it is tax exempt
while the median monthly earnings for civilian occupations in the
American Community Survey are subject to taxes. We assume an average
tax rate of 26 percent to make this adjustment.\2\ (We also suggest
making further adjustments by local cost of living.)
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\2\ We assume 15 percent Federal taxes and 11.2 percent State and
local taxes.
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We then compare the adjusted disability payment to the gross
earnings in the matrix. This analysis demonstrates that prevailing
earnings in 30 of the 66 education/occupation groups exceed the $3,737
payment (adjusted to $4,709) and could justify a higher compensation.
These 30 education/occupation groups are distributed as follows: 5
groups at the high school level, 10 groups at the middle-skills level,
and 15 groups at the bachelor's degree or higher level.
Adjusting for earnings growth: As a second step in this analysis,
we further adjust for lost potential earnings from expected earnings
growth. In this part of our analysis, we estimate earnings growth by
education and occupation for comparison with the flat TDIU payments. We
calculate this estimate by comparing the earnings of workers ages 25-34
to those of workers ages 45-54 (Table 2 of the attached). This analysis
demonstrates that while median earnings exceed $4,709 for workers ages
25-34 in 15 education/occupation groups, that number rises to 40
education/occupation groups for working veterans ages 45-54.
The 40 (of 66) combinations for workers ages 45-54 in which
earnings exceed $4,709 include 9 (of 22) education/occupation groups at
the high school level, 13 (of 22) education/occupation groups at the
middle-skills level, and 18 (of 22) education/occupation groups at the
bachelor's degree or higher level. The 25 education/occupation groups
in which the monthly median earnings of workers ages 45- 54 exceed
$4,709 and the median monthly earnings of workers ages 25-34 do not
exceed $4,709 include 7 education/occupation groups at the high school
level, 11 education/occupation groups at the middle-skills level, and 7
education/occupation groups at the bachelor's degree or higher level.
This earnings growth analysis (Table 3 of the attached) suggests 1
percent growth in inflation-adjusted earnings per year for most of the
education/occupation groups, which is based on observed annual growth.
If we were to adjust the TDIU payment by 1 percent per year, by age 50,
a veteran disabled at age 25 would see the $3,737 payment grow to
$4,840.
Further considerations: We want to be clear that this analysis
relies on a simple counterfactual based on prevailing wages in specific
occupations and does not make any complex adjustments for loss of
livelihood. We suggest that further research is needed to understand
what precedent exists in civilian injury cases, which is the most
relevant parallel we can think of to address the question of how to
adjust for disability. This investigation will be particularly
important given our expectation that a significant share of
disabilities occur in non-mappable occupations.
Last, we want to express concern that this matrix could be used to
reduce payments for workers in 36 education/occupation groups if the
career median is used and in 26 groups if the growth adjustment is
used. CEW takes the position that $3,737 is an absolute minimum monthly
payment for loss of economic potential and should, at the very least,
be subject to COLA.
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