TDIU and ERISA disability


Thanks for all you do to help fellow vets. I have a question regarding TDIU that I have seen raised a few times on VA forums but have not seen answered regarding TDIU. Can the Va take away your TDIU status because you receive money from a ERISA pre tax employee sponsored long term disability plan? When doing taxes every year, the insurance company sends a W-2 with an amount in wages tips and other earnings that is over the poverty threshold, but is also marked as Third party sick pay. This money is not from gainful employment or physically working any job or any 9-5. Nor is it money for employment or self employment. I report it to the IRS and do my taxes every year. The VA sent out a letter saying they plan to reduce compensation to the 90% level and sent an employment questionaire 21-4140 and 21-4138 statement in support of claim. Nowhere on the 21-4140 is there a place to explain. It is all very confusing. I have read that it does not matter if a person is a millionaire or owns much real estate or has high dividends on investments, if a person is qualified for TDIU that is all that matters. But I have also read that long term disability insurance payments may or may not be considered earned income even if you are totally disabled and have not worked. It makes little sense to me. It is like saying one is not qualified for TDIU based on their SSDI being too high. Both SSDI and long term insurance are paying an individual because they are disabled. Can I elect to not receive my long term disability payments in lieu of receiving TDIU?  Is this even legal for them to do? Any clarity you can shine on the subject would be greatly appreciated. Thanks.

Jim's Reply:

It's really very simple. The TDIU benefit counts income from gainful employment, nothing else. Gainful employment is that employment that generates an income above the federal poverty level. If you have no income from gainful employment, you may have income from any other source and it doesn't matter. Win the Lotto, inherit Aunt Gertrude's fortune, marry rich...if you aren't earning it through gainful employment it doesn't count.