[Code of Federal Regulations]
[Title 38, Volume 1]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 38CFR4.16]

[Page 365]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
                CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS
 
PART 4_SCHEDULE FOR RATING DISABILITIES--Table of Contents
 
                   Subpart A_General Policy in Rating
 
Sec. 4.16  Total disability ratings for compensation based on 
unemployability of the individual.

    (a) 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: Provided That, if there is only one such disability, this 
disability shall be ratable at 60 percent or more, and that, if there 
are two or more disabilities, there shall be at least one disability 
ratable at 40 percent or more, and sufficient additional disability to 
bring the combined rating to 70 percent or more. For the above purpose 
of one 60 percent disability, or one 40 percent disability in 
combination, the following will be considered as one disability: (1) 
Disabilities of one or both upper extremities, or of one or both lower 
extremities, including the bilateral factor, if applicable, (2) 
disabilities resulting from common etiology or a single accident, (3) 
disabilities affecting a single body system, e.g. orthopedic, digestive, 
respiratory, cardiovascular-renal, neuropsychiatric, (4) multiple 
injuries incurred in action, or (5) multiple disabilities incurred as a 
prisoner of war. It is provided further that the existence or degree of 
nonservice-connected disabilities or previous unemployability status 
will be disregarded where the percentages referred to in this paragraph 
for the service-connected disability or disabilities are met and in the 
judgment of the rating agency such service-connected disabilities render 
the veteran unemployable. Marginal employment shall not be considered 
substantially gainful employment. For purposes of this section, marginal 
employment generally shall be deemed to exist when a veteran's earned 
annual income does not exceed the amount established by the U.S. 
Department of Commerce, Bureau of the Census, as the poverty threshold 
for one person. Marginal employment may also be held to exist, on a 
facts found basis (includes but is not limited to employment in a 
protected environment such as a family business or sheltered workshop), 
when earned annual income exceeds the poverty threshold. Consideration 
shall be given in all claims to the nature of the employment and the 
reason for termination.


(Authority: 38 U.S.C. 501)

    (b) It is the established policy of the Department of Veterans 
Affairs that all veterans who are unable to secure and follow a 
substantially gainful occupation by reason of service-connected 
disabilities shall be rated totally disabled. Therefore, rating boards 
should submit to the Director, Compensation and Pension Service, for 
extra-schedular consideration all cases of veterans who are unemployable 
by reason of service-connected disabilities, but who fail to meet the 
percentage standards set forth in paragraph (a) of this section. The 
rating board will include a full statement as to the veteran's service-
connected disabilities, employment history, educational and vocational 
attainment and all other factors having a bearing on the issue.

[40 FR 42535, Sept. 15, 1975, as amended at 54 FR 4281, Jan. 30, 1989; 
55 FR 31580, Aug. 3, 1990; 58 FR 39664, July 26, 1993; 61 FR 52700, Oct. 
8, 1996]