Topic Topic Name 1 Reductions in Compensation Under 38 CFR 3.105(e) 2 Reductions in Disability Evaluations Under 38 CFR 3.344 3 Reductions in Disability Ratings Under 38 CFR 3.343 4 Reductions Requiring Consideration of Individual Unemployability (IU) Under 38 CFR 4.16 5 Changes in Veterans Pension Entitlement Under 38 CFR 3.105(f) 6 Reductions or Terminations Requiring Consideration of Continued Entitlement to Chapter 31 Benefits 1. Reductions in Compensation Under 38 CFR 3.105(e) Introduction This topic contains information about reductions under 38 CFR 3.105(e), including reducing or terminating compensation awards handling proof of substantially gainful employment when to apply the provisions of 38 CFR 3.105(e) concurrent increases and reductions authorizing reexamination reviewing new evidence and preparing the final rating, and determining the effective date. Change Date June 12, 2015 a. Reducing or Terminating Compensation Awards Under the provisions of , the rating activity prepares a proposed rating decision to reduce a combined evaluation or employability status, or terminate a running award by reason of a change in the severity of a Veteran’s service-connected (SC) disability. b. Handling Proof of Substantially Gainful Employment If evidence of substantially gainful employment is received but not clearly shown, refer the case to the authorization activity to develop for continued individual unemployability (IU). If substantially gainful employment is established, take rating action under the provisions of . c. When to Apply the Apply the provisions of only if a lower evaluation of an SC disability would result in a reduction or discontinuance of compensation payments in a
a. Applying the Provisions of 38 CFR 4.16 Use the table below to determine appropriate rating action and end product (EP) control when a reduction is warranted in a Veteran’s total schedular evaluation to a level meeting the IU requirements of . If the evidence shows … Then the rating activity … EP Control a reasonably raised claim for entitlement to IU exists Reference: For more information on reasonably raised claims for entitlement to IU, see M21-1, Part IV, Subpart ii, 2.F.2.m. proposes the reduction of the evaluation, and defers the issue of entitlement to IU for additional development to include sending VA Form 21-8940, Veterans Application For Increased Compensation Based on Unemployability. Rating EP remains pending for the deferred IU issue. Establish a separate EP 600 to control for the proposed reduction of the schedular evaluation. a reasonably raised claim for IU does not exist takes no further action on the issue of entitlement to IU. Clear the rating EP, if otherwise warranted, and establish EP 600 for the proposed reduction. b. Determining the Effective Date for IU The effective date for IU must take into account the date of reduction from the schedular 100 percent. Under , 22 Vet.App. 280 (2008), VA may potentially consider an IU claim for a particular SC disability even when a schedular 100-percent rating is already in effect for another SC disability in order to determine the Veteran’s eligibility for housebound benefits under . Note: The effective date for an IU rating in this case may overlap a period where a 100-percent schedular rating was already established, so long as all other requirements for that separate rating and effective date were met.