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Welcome to The Veterans Disability Nexus, where we provide unique insights and expertise on medical evidence related to VA-rated disabilities. Leah Bucholz, a US Army Veteran, Physician Assistant, & former Compensation & Pension Examiner shares her knowledge related to Independent Medical Opinions often referred to as “Nexus Letters” in support of your pursuit of VA Disability every Tuesday & Wednesday at 7AM Central.
Take control of your medical evidence related to your benefits and visit https://podcast.prestigeveteranmctx.info/veteran/ for more information and to connect directly with us!
Hey, guys. It's Leah B from Prestige Veteran Medical Consulting. I am a US army veteran physician assistant and former compensation and pension examiner. So today, we have a really great topic that we'd like to discuss, and we have Rebecca Deming from ProVet Legal on. She's been here several times, and we've had a lot of really great feedback for all of the fantastic information she provides.
Speaker 1:But for those of you who don't know her, Rebecca, do you wanna kinda tell everybody about you? Sure.
Speaker 2:Well, thanks, Leah. Happy to be here with you. I run a law firm called ProVet Legal. I'm an accredited VA attorney, and I work with four other three other attorneys. There's four of us total in the firm right now, and we represent veterans and their families to help them get benefits when they get denied.
Speaker 1:Yes. So she's got a lot of really great reviews online that you can check out and and great client experiences. I I always hear very positive things. So, if you're looking for an attorney to assist you through the process, through your appeals, they're they're a great resource to reach out to. But today's topic we're gonna talk about is veterans that own businesses.
Speaker 1:And can you own a business while receiving VA disability benefits? So, to help clear things up, Rebecca's gonna give her perspective on this. And I just wanted to launch into our first question, which is can veterans legally can veterans that have VA disability legally own or operate a business?
Speaker 2:As a general rule, yes. If you're getting VA disability benefits, there's no limit on your ability to earn income from any other source. So whether you own a business, whether you get a job, if you're if you're getting VA disability, that's on top of whatever you're earning through your own business or or the jobs you have. The only caveat that that comes in, and I think we'll kind of dive into this a little bit more, Leah, is when VA assigns total disability based on individual unemployability.
Speaker 1:Right. And and we're gonna talk about it more later as well, but there's there's a whole layer of service disabled veteran business owners out there and different benefits for them as well. So there there are many options out there. So, hopefully, we can kind of bring this to light for those of you that are either already own a business or thinking about starting a business.
Speaker 2:So Leah, I mean, you're you're a disabled veteran, and you own your business. So it's yeah. I mean, case in point, it in general, it's
Speaker 1:Mhmm.
Speaker 2:There's no issues with getting VA disability benefits and owning a business.
Speaker 1:Yeah. And there's and and, honestly, people probably don't know this about me, but I I not like I have a ton, but I have, like, a rental property, and we're gonna talk about this as well. And that's that's a business enterprise, and we're gonna talk about passive income versus active income, because a lot of you, like me, you know, maybe purchased a home when you were on active duty and moving around and things like that, and maybe you're renting it out. So we'll touch on that here in a few minutes. But, can we talk about owning a business and reduction of VA disability benefits?
Speaker 1:Can that happen sometimes, or or, you know, is it not really black and white?
Speaker 2:So to clear it up, it's if you're getting VA disability benefits based on your your ratings themselves, then VA will not reduce your your benefits no matter how much you earn. You could be the CEO of the next Google and also earn VA disability benefits. I think most of our veterans probably are not the CEOs of the next Google, which is why the benefits are are so helpful. But, yeah, there is generally no income limitation. But where the income limitation comes in is if you're getting if you're not at a 100% scheduler rating, so if your, you know, your right knee and your headaches and your your stomach issues and and your mental health all combined don't add up to a 100%, But VA has determined that you're not able to work because of your service connected disabilities.
Speaker 2:They'll pay you at the 100% level. They'll pay you it's called TDIU or total disability based on individual unemployability. And so that's where the stickiness comes in is, what counts as as working or being unemployed. And so we do sometimes have veterans that try to own businesses or they own a business, but they're only making a certain amount of money. And and in those situations, VA is gonna look more closely at how successful your business is and what kind of activities you're doing in your business.
Speaker 2:Because if they determine that you're essentially employable and that you're you've got more than marginal employment, you've got substantially gainful employment, then they will take away that TDIU designation. And so then you'll it will reduce down
Speaker 1:to whatever your score ratings are. Yeah. And and sometimes that's okay. Right? Because sometimes veterans have a period of time where they, really warrant that TDIU, but then eventually, maybe they are able to recover in some of those areas.
Speaker 1:And then they I know one veteran, for example, who was TDIU for years, and he got he got better and he improved and he was able to, have gainful employment again and and kind of move off of that. So, you know, there is there let's talk about that, that 100% scheduler versus TDIU. And and with TDIU, is that always going to be can that be static, or is that So,
Speaker 2:yeah, that's that's a great question. So with the 100% scheduler, like I said, if you're a 100% scheduler, and if it's total and permanent, VA is not gonna reevaluate that under any circumstances, unless you say under any circumstances. And as an attorney, I always think of the the exceptions to the rules, which are, you know, if you request that VA look at something again, if there's fraud allegations, VA will look at it. But, generally, once you're a 100% total and permanent, if it's scheduler, meaning not based on unemployment, then then it doesn't matter what if your situation improves, VA is not gonna relook at it. Now under TDIU, you can a lot of times we'll see VA give, TDIU.
Speaker 2:So you're rated at a 100% based on TDIU, and they'll consider it total and permanent, meaning that VA is not gonna relook at it. They're not gonna, send you for reevaluations periodically, but VA does still get your Social Security earning statements. And so if you start working again and you're and they see that you've got earning statements on your your annual Social Security earning statements, they they'll take another look at it potentially. And so what happens I mean, I don't know if everybody who files taxes understands how the Social Security earning statements are, how how those work. But if you're an employee somewhere, your employer has to file taxes with the IRS.
Speaker 2:And when you get your pay stub, you know, you see, like, the total amount you were paid and that your total salary and then the amount that was withheld for Social Security, and all that gets filed with the IRS. So the IRS has copies of what your Social Security earning statements are, and the Social Security administration has those. And so VA is able to get copies of those. So when it comes time to filing taxes, if they see that you're making above the poverty line, above the poverty threshold, they might reevaluate your entitlement to TEIU.
Speaker 1:Okay. So So And they can also just report. Hey, hey, VA. I'm I'm now able to, you know, own a business or whatever. Veteran's able to just report themselves to the VA so that they can get their entitlements changed as well.
Speaker 1:Right?
Speaker 2:I can. That brings up a couple good points. One is, so to be entitled to to TDIU, you have to show that you're unable to secure or maintain, so, like, get or keep substantially gainful employment. And so a lot of times people will say, oh, I got a job. I need to let VA know that that I'm not working anymore or that I started working again.
Speaker 2:Well, they get that job and because of the disabilities that they're suffering from, they might not have good sleep or they might have issues with authority because of a PTSD thing or flare ups of their their stomach issues or whatever it is. And so they get really excited that they started working a job. Then, you know, a couple months later, they either quit or or they get fired from that job. And then you're back in position of applying for TDIU again. So, typically, VA in order to say that you've you're maintaining employment, VA wants to see that you're you're working for a year in Okay.
Speaker 2:Substantially gainful employment. So there is a I think there's a a line on one of the forms that says, if you start working or if your situation changes, please let VA know. There's actually no regulatory requirement to inform VA of a change in your circumstances. Like I said, VA is able to monitor your Social Security earning statements. And so if they are looking at those and think that you're earning above the poverty level, they will reassess that, and they'll do a proposed reduction or proposed severance.
Speaker 2:So we can talk about the the process of, when VA decides they think they're they have to reduce something or sever something.
Speaker 1:So what about so Now going back to the business a little bit more, what if what if a veteran with TDIU owns a small side business, and it doesn't make a a ton of money?
Speaker 2:So that's where it gets into a little bit of the the gray area. And so it's really a facts based analysis, and VA is gonna be looking at how much money are you making. So if you're, a super active real estate agent and that's your business and you're earning a lot of commissions because you're showing a lot of houses, VA is gonna say, well, you're you're just because you're working for yourself doesn't mean that you're that you're unemployed or unemployable. But there is a lot of gray area about, what's considered a sheltered work environment. And so if under your business, you know, you're only able to work certain odd hours because your migraines kick in at unpredictable times.
Speaker 2:I have a a client who runs a business, and, she's only able to see a certain number of clients. Actually, I've had a few where, you know, a full book of business would would look like, I don't know, 200 clients. Maybe they're able to manage seven clients at a time. And so they're working these odd hours with a very limited scope of business because because of their disabilities. So it's both what are they doing?
Speaker 2:You know, what activities are they able to do? Are they able to give themselves more flexible work schedules because they're working for themselves and and the way they manage their clients, they're able to, have those adjustments. And and how much are they earning? So you'd mentioned, you know, having a a rental property or a, owning real estate, and that kind of comes into a, again, a very fact specific determination for VA. So if you're actively managing multiple properties, that's a full time job.
Speaker 2:I mean, if you're managing different contractors and rental agreements and real estate agents that are showing your property and and you're fixing it up between renters and whatever, you know, that's one thing. If you own a property and you're renting it out and you're getting you know, you hired someone to do the the showing and you're getting passive income from that, VA might see that on your taxes and and ask you questions about it, but that would not be employment. That would really be passive income. And so with the real estate stuff, it's if VA does propose to sever something, that's where you'd probably wanna get an attorney or an accredited agent involved to take a look at it and give you some guidance because it can get very, very fact specific, and you wanna try to protect the the benefits that you're entitled to.
Speaker 1:So that brings up a really good point that you've already kinda touched on, but substantially gainful employment. Can you talk a little bit more on that? Is there a set number that they consider substantially gainful employment?
Speaker 2:They use the federal poverty threshold for, which I think is different from from city to city, but it's about $1,200 a month. So if you're earning below a thousand dollars a month, you should be in the the safe zone no matter where you live.
Speaker 1:Okay. And so when we talked on passive passive versus active income or earned income, we talked we talked about real estate, but, are there some other types of income that a person can get, you know, whether it's investments or or anything else that you can think of that could be kinda caught up in this but maybe not considered earned income from a business standpoint?
Speaker 2:Yeah. I think, you know, if you're a day trader, if you're if you like to play the stock markets, which is essentially gambling, not a job, you know, unless you are an expert in in financial transactions, that would not be typically, that would not be considered earned income. We had a situation where there was one of those what were they called? Multilevel marketing companies. You're not supposed to call them pyramid schemes anymore.
Speaker 2:Right? Mhmm. And because of the way the the company was set up, if they had if the family had two accounts, they got more points towards the next level in the business. And so the wife of the veteran was actually running both his account and her own account. He wasn't doing any activity in it, but the account was under his name.
Speaker 2:So that was one where VA wanted to take a closer look, and they said, well, look. You've got income based on this multilevel marketing company that's associated with your name and and your account, and we had to get through statements from family members and and from the company and and whatnot, proof that he actually was not working at all, but that she was working. And that gets a little bit, you know, that gets a little bit funny on you know, depending on what the terms of the contract with multilevel marketing company are because you're essentially admitting to the government that you're dishonest to the multilevel marketing company about the way you have it set up. So, you know, they they are looking for for fraud. The office of inspector general I mean, you know, I I don't think they're out there with surveillance cameras driving down every Veteran street.
Speaker 2:But if there's stuff that just looks funny or if someone calls in, we we do see VA investigate fraud. And so sometimes situations like that, if you're trying to be too creative with how you structure your income, it could trigger an officer inspector general investigation to to see whether you're really entitled to that TDIU or if they think that you're gaming the system. So you do wanna maximize your benefits without gaming the system, if that makes sense.
Speaker 1:Sure. Sure. So, kinda touching back into that. So to help protect themselves, what kind of records should veterans keep if they're self employed and receiving benefits?
Speaker 2:They should keep a log of the hours that they're working, I think, would be, probably the the number one thing. I would if if they're able to keep a log of other productivity things like the number of clients they're seeing or the number of meetings they're having. But I I would say the number one thing is to really even though you're working for yourself and you're not maybe turning in your hours to an employer, you wanna keep really good logs. So if VA says, well, no. You're working full time just for yourself.
Speaker 2:You can show, no. I'm really working three hours a week, and getting this done on the side because I can't work a full time job. Mhmm. The other, you know, which is just general business advice anyway, is to keep good accounting records of your expenses, work with a bookkeeper so that if they say, oh, well, all of that's revenue, but you have overhead and and expenses to operating your business, then it's not all being attributed to you as as, income when a large portion of it is going to to cover overhead.
Speaker 1:Sure. So what kind of programs are out there to help veterans, that wanna start or grow a business that you're aware of?
Speaker 2:So there's the, vocational rehabilitation and education program, which is a really good program, if you qualify for it because VA will essentially pay to send you back to school or to get an education to start a career in a new field. And that one is is really good for people who are looking now if you're doing vocational rehabilitation education program, you're probably not gonna long term stay on total disability based on individual unemployability because the goal of the VR and E is to get you back to being employed and employable. So they're not gonna pay to get you those skills and then continue to pay for you to to not work.
Speaker 1:Mhmm.
Speaker 2:Unless you honestly, you tried it and it and it failed, and that does happen sometimes. You know? If people try to get reemployed and and their disabilities are just more severe than they thought, they do fail and then you can stay on the TDIU. Sure. But, you know, you're not gonna be able to to double dip essentially.
Speaker 2:And then you can register if you do start a business, you can register your business as a disabled small small business veteran disabled veteran owned business. Mhmm. And depending on what kind of business you run, there's, sometimes you're you might, have priority for contracting with government entities. You might get some discounts on franchise fees. There's maybe some tax benefits to being a a registered small, disabled veteran owned business.
Speaker 2:Mhmm.
Speaker 1:Yeah. And individual states, I'm sure, have different programs as well, for small businesses. Like, I know when I, started my business here in Texas, there was, like, a reduced fee for something. I don't know if it was a waived fee for, again, I can't recall the specifics, but there was something for veterans here in Texas that are starting businesses. So that's always something to look into is what does your state offer.
Speaker 2:And then there's a lot of local, you know, Facebook groups or Meetup groups or whatnot for, veteran entrepreneurs. Mhmm. Not necessarily disabled veteran. You know? I think usually those groups are for all veteran entrepreneurs, but it's the ones in in the Tampa Bay area that that I see are a wide variety of businesses, and they tend to support each other.
Speaker 2:They buy from each other. They help promote each other. It's sort of like, you know, one of those business net it's like any other business networking group with a really strong group of motivated people. So I'd look to your local community and see if there's a group like that near you and get involved.
Speaker 1:So what advice would you give veterans who wanna start a business but are worried about losing their benefits other than the advice you've already provided today?
Speaker 2:So first of all, I I just wanna reiterate, if if you're if you're, disability scheduler, if you're just you know, if you've got a knee condition, a hip condition, physical mental health conditions, what have you, there you can start the most successful business. Your benefits are not gonna be impacted. VA is not gonna relook at that. Even if it's mental health stuff, if, you know, and your mental health is based on social and occupational impairment, if you start a business, VA is not gonna relook at that and say, oh, well, that's evidence that you're getting better and and kind of take away your benefits. The only time that it comes into play is if you're getting TDIU.
Speaker 2:So the total disability based on individual unemployability. And I'd look at I mean, I think generally the people I work with are happier if they are able to work. Mhmm. So if you're able to work and and you say, well, no. I I don't wanna risk giving up my TDIU benefits.
Speaker 2:Well, you know, you're talking about maybe a couple thousand dollars at the most. You're talking about the difference between your scheduler rating and the 100% rating. And to do that, you're giving up all of the benefits of being a business owner. So you really have to weigh. It's a personal decision on how disabled you are and how much you you think you can dedicate to a business versus how how limiting your disabilities are.
Speaker 2:But if you're able to work, giving up those, you know, couple thousand dollars a month to be able to earn as a business owner, I think most of the people I work with and and communicate with are a lot happier when they're able to productively, contribute to society and and build something of their own. So I you know, yeah, you might lose out on that benefit, but overall, I think people are better off when they're able to to work. And if you try and you shouldn't be afraid to try and fail. Mhmm. Because VA shouldn't penalize you, and and they're not really looking for, you know, the first when you're starting up, if you start something and it doesn't work out, it's just more evidence that your your disabilities are preventing you from working.
Speaker 1:Sure. So where can veterans get reliable help for who who can they go to if they have questions about these sort of issues?
Speaker 2:So, they can go to a VSO, veteran service organization, especially if they're kind of thinking about filing a new claim or if they're worried about starting a business. There's also there's resources at the VSOs, for accessing vocational rehabilitation and education benefits. So that's a great place to start. If VA does propose to sever your benefits, so if you had TDIU, you started a business or got a job, and VA says, we're gonna propose to sever. At that point, you wanna reach out to an accredited claims agent or an accredited VA attorney and discuss your options for, whether it makes sense for them to sever or not, because, you know, you may not wanna dispute it if if VA is correct in severing it.
Speaker 2:But, there are certain things you can do to protect your benefits. And the the top one is you'd wanna request a a predetermination hearing within thirty days of getting that notice that they're proposing to sever.
Speaker 1:So that was incredibly helpful, Rebecca. Thank you so much for showing up as as you always do with with tons of helpful information. And veterans, if you found this valuable, please hit the like button and share this with someone that is thinking about starting a business. And as always, thank you for your service. And, Rebecca, thanks thanks as always for being on.
Speaker 2:Yeah. Thanks, Leah.
Speaker 1:It was
Speaker 2:great seeing you.
Speaker 1:Alright. Talk to you guys soon.