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Substantially Gainful Employment Definition

Substantially gainful employment is a term that comes into play when addressing the issue of total disability based on individual unemployability (TDIU).  Namely, TDIU is awarded in cases where the veteran is unable to obtain and maintain substantially gainful employment as a result of their service-connected conditions.

Per the U.S. Department of Veterans Affairs (VA) M21-1 MR manual, substantially gainful employment allows a person to “earn their livelihood with earnings common to the particular occupation in the community where the veteran resides.”  In other words, substantially gainful employment refers to an annual income that is above the federal poverty threshold for one person.

CAVC Interprets Meaning of Substantially Gainful Employment

 In March 2019, the Court of Appeals for Veterans Claims (CAVC) issued a precedential decision that clarified the meaning of the phrase “substantially gainful employment.”  As a result of Ray v. Wilkie, the Court finally established parameters for VA so that adjudication will be more consistent and veterans applying for TDIU will know what to expect.  The Court found that the phrase “unable to secure and follow a substantially gainful employment” in § 4.16(b) has both an “economic” and “noneconomic” component.  Economic refers to the veteran’s ability to earn more than a marginal income as determined by the federal poverty threshold for a single person.  The noneconomic component involves what to assess in determining if a veteran can actually work.  The Court concluded that attention must be given to the following:

  • Veteran’s history and education, skills, and training;
  • Whether the veteran has the physical ability (both exertional and nonexertional) to perform the type of activities (e.g. sedentary, light, medium, heavy or very heavy) required by the occupation at issue – including limitations on lifting, bending, sitting, standing, walking, etc., and auditory/visual limits; and
  • Whether the veteran has the mental ability to perform the activities required by the occupation at issue – including limitations on memory, concentration, ability to adapt to change, handle work place stress, get along with coworkers, and demonstrate reliability and productivity.

In regards to the above-mentioned factors, the Court emphasized that they do not constitute a checklist.  Instead, a factor only needs to be considered if raised by the evidence of record.