TDIU & disability insurance policy

Question:

Hi Jim 100% TDIU. VA wants to drop me back to 90 % because they say I made earned income. This is not true. I received money monthly from a employer sponsored long term disability insurance policy. Does a insurance policy affect my eligibility for TDIU? Where can I find the regulation on this issue? Thanks

Jim's Reply:

It would appear that a mistake has been made. The income that is counted for the TDIU unemployability benefit is that earned by gainful employment. I'm seeing a fair amount of occurrences very similar to yours that seem to be happening since VA ended the VA Form 21-4140 to verify our income and switched over to an income matching program using IRS & SSA data. Somehow, someone isn't interpreting how the reports should affect you and the person who proposed to reduce your rating believes that the insurance payments are income from gainful employment. You must now timely and formally appeal in writing to tell VA that they made an error and that you are not gainfully employed. More about gainful employment is here