Can A 100% Disabled Veteran own a Business?

August 12, 2022

A frequently asked question amongst many veterans is: Are 100% disabled veterans allowed to own a business and continue to collect VA benefits, the answer, is yes, but there is an exception to this rule.

First, it is important to distinguish being having a disability rating of 100%, versus the VA paying the Veteran at 100% because they qualify for “Total Disability due to Individual Unemployability”

The exception to the rule on owning a business is somewhat complicated and applies when a Veteran are receiving TDIU. If a Veteran is receiving TDIU, they are not permitted to make any work-related income above the federal poverty threshold, including through their own business. On the other hand, there is no cap on income if having a disability rating of 100%

Types of 100% VA Disability and How They Affect Your Ability to Work

When a Veteran has a disability as 100% disabled, it means they are receiving VA disability benefits at the 100% level. This level refers to their impairment rating. When the VA awards disability benefits to a Veteran, it assigns them a rating on a scale of 0% to 100%. The Veteran’s rating determines how much disability compensation they are eligible to receive each month. Because 100% is the highest rating on the scale, it corresponds to the maximum compensation. There is an exception to this known as “Special Monthly Compensation,” but that is another topic for rare circumstances.

Most Veterans who apply for benefits strive for a 100% rating because it results in the highest compensation.

In order to determine your impairment rating, the VA reviews the medical evidence that the Veteran submit with their disability application. It compares this evidence to the rating criteria for the medical conditions being sought.

Conditions for which the VA grants 100% disability have very strict requirements to receive that impairment rating. If the Veteran submits evidence making it clear you meet those requirements, they can receive 100% disability. They can also have multiple conditions that are rated at less than 100%, but when combined, equal 100%. If a Veteran’s impairment or impairments combined qualifies a Veteran for 100% disability, there are no income restrictions. The Veteran can run your own business and make as much money as you want.

Permanent and Total Disability

Permanent and Total Disability or “P&T,” is awarded to Veterans who have severe medical conditions that are unlikely to ever get better. When a Veteran is classified as P&T, their level of impairment is 100%.

Being classed as P&T gives the Veteran a guarantee of 100% disability for the rest of their life. Veterans who are not P&T are subject to having their ratings re-evaluated at certain intervals. The only way to lose a 100% P&T disability rating after being classified as P&T is if the VA finds evidence that the Veteran received the P&T designation fraudulently. 

Regardless of whether the Veteran is rated P&T, they may own a business, with no limitations on what they may earn. 

Total Disability based on Individual Unemployability

If a Veteran’s medical condition does not meet VA’s criteria for a 100% rating, there is another way to receive what is effectively total disability and get paid at the 100% rating. They can apply for Total Disability based on Individual Unemployability (TDIU). With TDIU, a Veteran can receive disability at the 100% level even if their impairment rating is lower. The VA grants TDIU to Veterans who can prove that their medical condition prevents them from sustaining meaningful, or gainful employment.

Since TDIU is based on a Veteran’s inability to work, they are generally not allowed to earn “substantial” while receiving it. “Substantial,” as defined by the VA, means any amount of income above the federal poverty level. You can own a very small business that brings in a few dollars here and there, but if the VA catches wind that the Veteran is earning a “substantial” income from their business, the VA may discontinue the TDIU, and they will no longer receive disability payments at the 100% rate.

VA disability is notoriously complicated, and many Veterans who receive it have an understandable fear of doing something that may cost them their benefits. 

If your service-connected disabilities leave you too disabled to work, but you are not receiving either 100% disability or TDIU, contact Law Office of Andrew P. Gross today.