At what point does a lally column need to be replaced and or reinforced
That certainly is not just surface rust.The rust is exfoliating and has compromised the structural integrity of the column. I would note this as a safety issue and recommend the column be replaced.
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Is it schedule 40 and is it concrete filled?
I am assuming it is concrete filled but the schedule of the pipe is beyond the scope of the inspection. The pictures of the pipe tell me that the structural integrity is in question.
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It seemed at least sch 40 and filled (assuming with concrete).
Heavy exfoliating rust on the columns can lead to crushing or splitting and a structural collapse, but unless it is showing the concrete fill and you can’t poke a screw driver in it, I would just say it needs to be repaired before it needs replacement. I would also be questioning what in the surrounding area that might have caused rusting of that caliber. The cause needs to be addressed as well as the repairs to the column. Hitting the column with a hammer or similar object could verify if it is concrete filled and extent of the flaking rust on the column.
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Marcel, how would you repair this column?
The OP said it is a lally. I’ve never seen a lally filled with concrete nor do I know how you’d fill it. (Maybe this is a regional terminology difference.)
In an event, I scrape the column with my big screwdriver to see how thick the rust flakes are and how many come off of a small area. Flake thickness gives you a sense of the level of deterioration. And then I tap the scraped area with that screwdriver. A solid ring is good, a dull ding indicates very thin metal. And I will stab the column with my screw driver to confirm strength.
By replacing it!! 
Grind off all the flaking rust assuming it is schedule 40, prime it and repaint and add asphalt spray on the bottom 6". We don’t see the upper part of the column, so it is hard to judge what the whole condition is. The flaking might be only skin deep. If it is and concrete filled, it can be salvaged in my opinion. But I am sure some will disagree.
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Marcal, I may one that disagrees with you! I do agree that it needs to be determined what caused it to rust to that degree. Could the column be outside?
The column is inside a basement that had been neglected for a long time. Poor grading, water entering via windows, etc… the upper portion of the columns are solid.
Pretty much what I expected to see.
I see no problem in salvaging that column and it can be repaired.
Thanks Simon for posting the picture of the basement. Seeing the upper part of the column helps. It probably can be salvaged.
[quote=“jdepiero, post:14, topic:154631, full:true”]
It probably can be salvaged. [/quote]
Sure, looking at it from a contractors perspective and making a profit.
From a consumers/inspectors POV, it is likely less expensive, faster, and a better overall repair to simply replace the unit.
It’s all about man hours charged vs cost of materials.
Guess which costs more and brings more profits!!
You are absolutely correct, JJ. It can be salvaged, but is it cost and time effective? IMO, no.
I disagree. Since that column is in the concrete, you have to cut it out and replace it with a column that will cost you $100 +/-, fill the hole, buy concrete patch, lag anchors and repaint.
Vs/ Paint, grinder and wheel and an hour of grinding smooth and repaint.
Figure it out.
Don’t forget the labor running around to get the material.
And don’t forget that if you replace with a concrete filled lally column, that adds to the cost and labor for welding top and bottom bearing plates.
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this may be a good read.
I don’t like wars, I fix them. LOL
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I wanted to thank all for their feedbacks, evaluation, recommendations (repair/replace). Even/especially when there isn’t a 100% consensus, it helps to look at things more critically and assess the approaches all sides are taking. It does help me take a step back and sometimes debate with myself, even though I may have a standard opinion/response to an issue.