How to Apply for the Individual Unemployability (IU) Benefit

by Contributor ; Updated July 27, 2017

Items you will need

  • VA form 21-8940
  • Supporting Documentation

The Increased Compensation Based on Unemployability, better known as the "Individual Unemployability Benefit" (IU) is a benefit awarded by the Veterans Administration to disabled veterans that are unable to maintain gainful employment. This benefit is designed for the veteran who is not 100 percent disabled but cannot maintain a gainful employment.

The definition of unemployability is "the inability to secure and follow a substantially gainful occupation" due to a service connected disability. It is not synonymous with the word unemployed.

Gainful employment is defined by the VA as "employment at which non-disabled individuals earn their livelihood with comparable earnings."

IU is a benefit that helps the VA ensure that veterans don't slip through the cracks into financial hardship because of a disability rating.

Step 1

Download and print or request VA form 21-8940, "Veteran's Application for Increased Compensation Based on Unemployability". See the link in the References section.

Step 2

Complete the VA form 21-8940 as completely as possible. Give the VA as much information as you can regarding your medical condition and employment situation/history.

Step 3

Attach any medical and employment evidence that supports your claim. It is critical to provide as much information as possible. If you do not have the records, ensure that you give the VA instructions on how to obtain those records by providing hospital names, doctors, phone numbers, etc.

Step 4

Forward the VA form 21-8940 and any supporting evidence to the nearest Veterans Administration Office. You can find the nearest VA hospital or office on the VA's website.


  • If a veteran is awarded increased compensation based on IU, they can continue to earn income from "marginal employment" which is defined by the VA as any income less than the poverty level established by the U.S. Census Bureau.