HB9135, the TDIU Reform Act of 2026, would amend title 38 of the U.S. Code to expressly codify the Department of Veterans Affairs’ authority to award total disability compensation based on individual unemployability (TDIU). Under the bill, a veteran may be assigned a total disability rating if service-connected disabilities prevent the veteran from securing or following substantially gainful employment. The bill sets out eligibility thresholds, including a single disability rated at 60 percent or more, or multiple disabilities with one at 40 percent or more and a combined rating of 70 percent or more, while also directing VA to treat certain related disabilities as one disability for threshold purposes.
The bill also preserves a path for veterans who do not meet the percentage thresholds but are still found unable to work because of service-connected conditions. In those cases, the rating board must submit a detailed statement to the Director of Compensation Service, who would make the final unemployability determination. The bill defines marginal employment and clarifies that work below the poverty threshold, or certain protected employment such as family businesses or sheltered workshops, does not count as substantially gainful employment.
A notable new limitation in the bill would bar payment of TDIU to veterans age 67 or older, but only for veterans who first receive TDIU on or after December 31, 2026. This age-based cutoff would be a significant change to current law and could affect future claimants approaching retirement age. The bill also instructs VA to disregard non-service-connected disabilities and prior unemployability status when determining eligibility.
The bill’s impact on state law is indirect, because it amends federal veterans’ benefits law rather than state statutes. Its practical effect would be on VA compensation administration, veterans receiving or seeking TDIU, and the internal standards used by VA rating boards and the Director of Compensation Service. It also includes a clerical amendment to the chapter’s table of sections to reflect the new section 1170.
There is no recorded committee debate or vote history in the provided material, so sentiment cannot be measured from hearings or roll calls. Based on the text alone, the bill appears to have a mixed policy character: it codifies and clarifies TDIU eligibility and protected employment concepts, while also imposing a new age-based limitation that could be controversial among veterans’ advocates and claimants. The main point of contention is likely the proposed cutoff at age 67, which may be viewed as restricting benefits for older veterans even when they remain unemployable due to service-connected disabilities.
HB9135 would amend federal veterans’ benefits law in title 38 by creating a new statutory section governing total disability ratings based on individual unemployability, replacing or codifying VA’s current TDIU framework in statute. It would set eligibility standards, define marginal employment, require referral of certain non-threshold cases to the Director of Compensation Service, and add a new age-based limitation on future TDIU awards. The bill does not directly alter state law, but it would affect veterans, VA adjudicators, and compensation claimants nationwide.
No committee transcripts or votes were provided, so there is no recorded legislative sentiment to summarize from debate or floor action. On the face of the bill, the measure appears partly supportive of veterans by codifying TDIU and clarifying eligibility, but also restrictive because it adds a new prohibition on TDIU payments for veterans age 67 and older beginning with future awards. That combination suggests the bill could draw both support for clarity and opposition over benefit limitations.
The most notable point of contention is the bill’s proposed age 67 cutoff for TDIU payments, which would apply only to veterans first receiving TDIU on or after December 31, 2026. Veterans’ advocates may object that the restriction denies benefits to older veterans who remain unable to work because of service-connected disabilities. Another possible issue is the bill’s codification of eligibility thresholds and the continued role of the Director of Compensation Service in borderline cases, though those provisions are more likely to be viewed as administrative clarification than major controversy.