Incremental Validity is used to determine if a new psychological measure will provide more information than measures that are already in use. If a new test doesn't provide any new information than the current, simpler measures are already providing then the new test is unnecessary and doesn't need to be used.
An example would be a school psychologist who was trying to identify learning delays in students so they could receive a specialized curriculum. She first uses grades and teacher interviews to identify any students who may be having trouble learning material. She then uses a test which is supposed to identify students with learning delays. The test would be incrementally valid if it identified students who had learning delays that had gone unnoticed while using the previous grade and interview method. If no new students were identified using the measure then it would not be incrementally valid because it failed to do anything more than the previous method.