VA Form 21-8940
Veteran's Application for Increased Compensation Based on Unemployability
Who fills it
veteran
Journey phase
Filing Your Claim
Estimated time
45-90 minutes. Have your last 5 years of employment history and earnings on hand.
When to file
Once you have either (a) one SC disability ≥60%, or (b) combined ≥70% with one ≥40%. If below those thresholds, file anyway and request extra-schedular consideration under 4.16(b). Per Rice v. Shinseki, TDIU is part-and-parcel of any increased rating claim and must be considered when raised.
Your service-connected conditions prevent you from working a job that pays above the federal poverty line ($14,580 in 2024 for a single individual; "marginal employment" exception applies to small or sheltered work).
Gather before you start
—Names and addresses of every employer in the last 5 years
—Approximate dates worked at each employer (start/end)
—Approximate gross monthly earnings at each employer
—Number of hours per week at each job
—Reason for leaving each job - be specific (medical, layoff, performance, etc.)
—Any periods of unemployment longer than 90 days and what you were doing
—Highest level of education completed
—Any vocational training, certifications, or apprenticeships
—Doctor's opinion that your service-connected conditions prevent gainful employment (private nexus letter or VA Form 21-2680 if applicable)
—Most recent W-2s and Schedule SE if self-employed
Attach with the form
—Doctor's opinion (nexus letter) tying inability to work to service-connected conditions
—Most recent W-2s and pay stubs (last 5 years)
—Schedule SE if self-employed
—VA Form 21-4192 (Employer Information) - VA will send to your last employer; you can submit one yourself
—Vocational rehab records or VR&E denial letter (if you applied)
—SSA disability award/denial (if applicable - different standard but useful evidence)
Section I - Veteran Identification
Blocks 1-5Veteran name, SSN, VA file number, address, phonePII
Same identification as 21-526EZ. Include VA File Number from prior correspondence.
Example
(use same details as 21-526EZ)
Common mistakes
- Mismatched name or SSN - TDIU claim files separately from main jacket and rater can't see your existing ratings.
Section II - Service-Connected Conditions Affecting Employment
Block 6Which service-connected conditions prevent you from workingRepeatable
List each SC condition that contributes to your inability to work. For each, briefly describe HOW it prevents work (pain prevents lifting > 10 lbs, panic attacks prevent customer interaction, fatigue prevents 8-hour shifts, etc.). VA examines the COMBINED effect, not each condition in isolation per Geib v. Shinseki.
Example
e.g., 1. Lumbar DDD (40%): Cannot sit or stand >30 min. Cannot lift >10 lbs. Pain medication causes drowsiness. 2. PTSD (70%): Severe anxiety in customer-facing roles. Hypervigilance disrupts focus. Sleep deprivation prevents reliable attendance. 3. Sleep apnea (50%): Daytime fatigue and inability to maintain alertness for 8-hour shifts.
Common mistakes
- Listing only your highest-rated condition - TDIU considers the combined effect of all SC conditions.
- Generic descriptions ("my back hurts") - VA needs functional limitation language: "cannot lift >10 lbs", "cannot sit >30 min", "miss 5+ days/month".
- Including non-service-connected conditions in this section - VA cannot consider them for TDIU. Mention only as context for the overall picture.
Authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
Geib v. Shinseki, 733 F.3d 1350 - Single examiner not required to give TDIU determination; rater's job to combine.
Rice v. Shinseki, 22 Vet. App. 447 - TDIU is part and parcel of an increased rating claim - must be considered when raised.
Related ClaimRecon tools
Rating Calculator - Verify your combined rating qualifies under 4.16(a) schedular TDIU thresholds.
Doctor Packet - Build a doctor packet that includes nexus opinion on inability to work.
Section III - Employment History (Last 5 Years)
Blocks 11-19Each employer in the last 5 years (most recent first)Repeatable
For each job in the last 5 years: employer name, address, dates worked, gross monthly earnings, hours per week, type of work, and reason for leaving. Include part-time, temporary, self-employment, and "marginal" work (sheltered, family business). VA needs the full picture to apply 4.16 correctly.
Example
Employer 1 (most recent): Name: Acme Manufacturing Address: 100 Main St, Phoenix AZ 85001 Dates: 03/2022 to 06/2023 Earnings: $3,800/month gross Hours: 40/week Type: Forklift operator Reason for leaving: Could not lift required weight due to lumbar DDD; supervisor recommended I leave.
Common mistakes
- Skipping marginal work (under-the-table, family business, sheltered employment) - under 4.16(a), only SUBSTANTIALLY GAINFUL employment counts. Marginal work below the federal poverty threshold doesn't disqualify you.
- Vague reasons for leaving ("personal reasons") - be specific. "Pain prevented lifting required for the job" is the right framing.
- Listing self-employment without earnings - even small self-employment counts; report gross earnings and hours.
- Forgetting unemployment periods - list any gap >90 days and explain.
Authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
M21-1 IV.ii.3.E - How raters apply 38 CFR 4.16(a) and 4.16(b).
Section IV - Last Day of Work
Block 20Last date you worked full-time
The exact date you stopped working at a job paying above the federal poverty line. This date can affect your TDIU effective date. If you've only had marginal employment since, that's reported but doesn't reset this date.
Example
e.g., 06/30/2023
Common mistakes
- Confusing the date you "applied for TDIU" with "stopped working" - these are different and TDIU effective date depends on the work-stop date.
- Reporting a marginal-work end date as the "last full-time" date - VA distinguishes; report each accurately.
Authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
38 CFR 3.400 - Effective date rules including ITF protection of effective date.
Section V - Education and Training
Blocks 23-25Highest education + vocational training
Highest grade or degree completed. Any vocational training, apprenticeships, certifications. VA uses this to evaluate whether your service-connected conditions, combined with your education and work history, leave you employable in any substantially gainful occupation.
Example
High school diploma 2003. Vocational welding certificate 2005. Forklift certification 2018.
Common mistakes
- Listing only formal degrees and forgetting certifications - both matter for vocational analysis.
- Inflating training that you never completed - VA verifies through transcripts.
Authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
M21-1 IV.ii.3.E - How raters apply 38 CFR 4.16(a) and 4.16(b).
Section VI - Efforts to Find Work
Block 26Description of efforts to obtain or maintain employment
Explain what you have tried since stopping work - applications submitted, interviews attended, attempts at vocational rehab, accommodations requested but denied. Showing you have TRIED to work is critical to the credibility of the TDIU claim.
Example
e.g., Applied to 23 jobs between July 2023 and December 2023 - 4 interviews, no offers. Applied to VR&E April 2023 - denied as "not feasible for employment due to severity of SC conditions." Tried at-home customer service work in October 2023 - discontinued after 3 weeks because PTSD-driven panic attacks prevented call quality.
Common mistakes
- Saying "I haven't tried" - VA infers lack of motivation. Even attempting and failing is strong evidence of unemployability.
- Forgetting failed VR&E referrals - a VR&E denial as "not feasible for employment" is strong TDIU evidence under 4.16.
Authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
M21-1 IV.ii.3.E - How raters apply 38 CFR 4.16(a) and 4.16(b).
Related ClaimRecon tools
VA Form 28-1900 - Apply for VR&E (Ch31) - even denial of VR&E supports TDIU.
Section VII - Current Income
Blocks 27-28Current monthly income from any source (excluding VA benefits)PII
Report all current income except VA disability benefits: SSA, retirement, spouse's income, marginal work, family business, etc. This is informational; VA does not deny TDIU based on non-work income, but the picture must be honest.
Example
e.g., SSA disability $1,400/month; spouse W-2 income $4,500/month; no other income.
Common mistakes
- Including VA disability compensation in this section - it does NOT count toward "income from work" for TDIU.
- Omitting SSA disability - you must report it. Different program, different standard, but the income is real.
Authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
Section VIII - Remarks
Block 29Additional remarks
Anything else relevant. Common uses: (1) explicitly request consideration under 4.16(b) extra-schedular if you don't meet 4.16(a) thresholds, (2) note IDES enrollment, (3) note Rice v. Shinseki TDIU-as-part-of-increase argument if relevant, (4) request expedited processing if eligible.
Example
e.g., I do not meet the schedular threshold under 38 CFR 4.16(a) (combined rating 60% with one rated 40%) but my service-connected conditions still prevent substantially gainful employment. I request consideration for extra-schedular TDIU under 38 CFR 4.16(b) and referral to the Director of Compensation Service.
Common mistakes
- Failing to request 4.16(b) extra-schedular when below thresholds - without explicit request, raters may deny without considering it.
- Restating information already in other sections - keep remarks focused on what doesn't fit elsewhere.
Authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
Rice v. Shinseki, 22 Vet. App. 447 - TDIU is part and parcel of an increased rating claim - must be considered when raised.
Section IX - Signature
Block 30Signature, date, and certificationPII
Sign and date under penalty of perjury. By signing, you authorize VA to send VA Form 21-4192 to your last employer for verification of dates and reason for separation.
Example
(signature/date when filing)
Common mistakes
- Forgetting to date - VA will return for completion.
- Not realizing VA will contact your last employer - be honest in Section III; the employer is asked the same questions.
Statutory & regulatory authority
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
38 CFR 4.16 - Schedular TDIU: 1 disability ≥60% OR multiple disabilities w/ combined ≥70% incl. one ≥40%; extra-schedular under 4.16(b).
38 CFR 4.25 - Mathematical formula for combining multiple ratings (not simple addition).
38 CFR 4.26 - 10% bonus added to combined value of paired-extremity ratings before final combine.
38 USC 1110 - Service-connected compensation for wartime veterans.
38 USC 1131 - Service-connected compensation for peacetime veterans.
38 USC 5101 - Standardized form requirement.
M21-1 IV.ii.3.E - How raters apply 38 CFR 4.16(a) and 4.16(b).
Rice v. Shinseki, 22 Vet. App. 447 - TDIU is part and parcel of an increased rating claim - must be considered when raised.
Geib v. Shinseki, 733 F.3d 1350 - Single examiner not required to give TDIU determination; rater's job to combine.
Hart v. Mansfield, 21 Vet. App. 505 - Staged ratings apply to increased-rating claims, not just initial.