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Background: Concurrent Receipt 2020-10-26

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Concurrent Receipt: Background and Issues for Congress
See this link for the full report: https://fas.org/sgp/crs/misc/R40589.pdf <---

Notice: This report does not include information pertaining to PENDING Concurrent Receipt bills that might have been introduced in Congress. See link at bottom of this page to review the current (active) CRSC laws summarized in
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 63 * October 2017


Background

In 1891, Congress first prohibited payment of both military retired pay and a disability pension under the premise that it represented dual or overlapping compensation for the same purpose.
The original law was modified in 1941, and the present system of VA disability compensation offsetting military retired pay was adopted in 1944. Under this system, retired military personnel were required to waive a portion of their retired pay equal to the amount of VA disability compensation, a dollar-for-dollar offset.1 If, for example, a military retiree received $1,500 a month in retired pay and was rated by the VA as 70% disabled (and therefore entitled to approximately $1,000 per month in disability compensation), the offset would operate to pay $500 monthly in retired pay and the $1,000 in disability compensation. The advantage for the retiree was that VA disability compensation was not taxable. For many years some military retirees and advocacy groups sought a change in law to permit receipt of all, or some, of both payments. Opponents of concurrent receipt frequently referred to it as double dipping, maintaining that it represented two payments for the same condition.

Concurrent receipt refers to the simultaneous receipt of two types of federal monetary benefits: military retired pay and Department of Veterans Affairs (VA) disability compensation. Prior to 2004, existing laws and regulations dictated that a military retiree could not receive two payments from federal agencies for the same purpose. As a result, military retirees with physical disabilities recognized by the VA would have their military retired pay offset or reduced dollar for-dollar by the amount of their non-taxable VA compensation.

Legislative activity on the issue of concurrent receipt began in the late 1980s and culminated in the provision for Combat-Related Special Compensation (CRSC) in the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (P.L. 107-314). Since then, Congress has added Concurrent Retirement and Disability Payments (CRDP) for those retirees with a disability rated at 50% or greater, extended concurrent receipt to additional eligible populations, and further refined and clarified the program.

There are two common criteria that define eligibility for concurrent receipt: (1) all recipients must be military retirees and (2) they must also be eligible for VA disability compensation. An eligible retiree cannot receive both CRDP and CRSC. The retiree must choose whichever is most financially advantageous to him or her and may change the type of benefit to be received during an annual open season. In FY2017, approximately one-third of the retired military population was receiving either CRSC or CRDP at a cost of $12.4 billion. Nevertheless, there are also military retirees who receive VA disability compensation but are not eligible for concurrent receipt. Determining whether to make some or all of this population eligible for concurrent receipt remains a point of contention in Congress. The Congressional Budget Office (CBO) has estimated that to extend benefits to all veterans who would be eligible for both disability benefits and military retired pay would cost $30 billion from 2015 to 2024. In 2016, CBO estimated that eliminating concurrent receipt would save the government $139 billion between 2018 and 2026.

Note: See the following for a summary of the laws pertaining to CRSC.
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 63 * October 2017

VOLUME 7B, CHAPTER 63: “COMBAT-RELATED SPECIAL COMPENSATION (CRSC)”

https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_63.pdf <---LINK

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