100% DoD and VA ratings and pay

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stepdale

PEB Forum Regular Member
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Hello,
I will try to keep this as short as simple as possible.

I recently received a medical retirement for cancer, which gave me a 100% rating on the permanent disability retirement list. The VA also gave me a 100% disability rating for the cancer, along with a host of other issues (sleep apnea, joint pain, arthritis, etc.). I retired with almost 25 years of service, but my military pension is based at the highest level (75%) instead of time in service (62.5%). All of my conditions are service related; none are combat related.

In my meetings with the DAV, the local VA rep, the Retirement Services Officer (and my research on the internet), I was told that I would receive my full military pension (based on 75%) and VA disability without any offsetting since CRDP had been phased out for all veterans rated 50% or higher. My final day in the military was 21OCT14, and on 1 DEC I received my first pension payment which was for the full amount minus SBP costs and federal income tax withheld. I have not begun receiving VA disability payments, but was told they should start coming in on 1FEB.

Now comes the rub. Last Friday I received my RAS and it contained a new calculation showing a VA waiver for slightly over $1100. When I receive my next pension check on 1 JAN, it will be almost $1000 less than before. I called DFAS today and the rep there told me that whoever told me I would receive both at the full rate was wrong, that no one no matter how high their rating, no retiree could receive both at the full amount. I asked her what law or reg this was based on, and her answer was "That's just the way it is."

I will contact my VA rep as soon as possible, but in a quick search on the internet, I found an obscure posting in a forum that said for those medically retired and receiving VA disability, the combined total of the two pays cannot equal more than what you would receive for your retirement based on time in service instead of disability. I did the math, and that appears to be true as the VA waiver of $1100 reduces my pension from one based on 75% of high three to about 62%.

My questions is, is this true? If so, I will speak to MEB personnel, VA rep and others to let them know about this as none of them mentioned it, and believe me, I questioned them thoroughly so I could figure out my final pay to support myself and my family.
Thank you,
Dale
 

nwlivewire

PEB Forum Regular Member
PEB Forum Veteran
Hello,
I will try to keep this as short as simple as possible.

I recently received a medical retirement for cancer, which gave me a 100% rating on the permanent disability retirement list. The VA also gave me a 100% disability rating for the cancer, along with a host of other issues (sleep apnea, joint pain, arthritis, etc.). I retired with almost 25 years of service, but my military pension is based at the highest level (75%) instead of time in service (62.5%). All of my conditions are service related; none are combat related.

In my meetings with the DAV, the local VA rep, the Retirement Services Officer (and my research on the internet), I was told that I would receive my full military pension (based on 75%) and VA disability without any offsetting since CRDP had been phased out for all veterans rated 50% or higher. My final day in the military was 21OCT14, and on 1 DEC I received my first pension payment which was for the full amount minus SBP costs and federal income tax withheld. I have not begun receiving VA disability payments, but was told they should start coming in on 1FEB.

Now comes the rub. Last Friday I received my RAS and it contained a new calculation showing a VA waiver for slightly over $1100. When I receive my next pension check on 1 JAN, it will be almost $1000 less than before. I called DFAS today and the rep there told me that whoever told me I would receive both at the full rate was wrong, that no one no matter how high their rating, no retiree could receive both at the full amount. I asked her what law or reg this was based on, and her answer was "That's just the way it is."

I will contact my VA rep as soon as possible, but in a quick search on the internet, I found an obscure posting in a forum that said for those medically retired and receiving VA disability, the combined total of the two pays cannot equal more than what you would receive for your retirement based on time in service instead of disability. I did the math, and that appears to be true as the VA waiver of $1100 reduces my pension from one based on 75% of high three to about 62%.

My questions is, is this true? If so, I will speak to MEB personnel, VA rep and others to let them know about this as none of them mentioned it, and believe me, I questioned them thoroughly so I could figure out my final pay to support myself and my family.
Thank you,
Dale

As I understand it,

The most you can get with CRDP is all of your VA and whatever the "high three" is for your military retirement.

If you came into the service (to include DEP time) PRIOR to 08 SEP 1980, you retirement is calculated under Final Pay.

Did you sign your very first military contract prior to 08 SEP 1980? If so, you will fall under final pay (which is a few more dollars better than High 3). The date you signed is what counts - not the first day you went to Basic.

Yes. You were PDRL'ed with 75% Army. But your regular retirement is 62%.

So you will be able to get all your 62% (minus taxes), plus all your VA (tax free).

That's my understanding.

Others will chime in shortly if I'm wrong on this!

There are a few states that do not state tax military retirement. I know Texas and Washington State are a couple of them that don't state tax your military retirement.

The Feds - we have them always.... unless you qualify for CRSC.

CRSC is combat/combat-related pay and is non-taxable.

V/R,
nwlivewire
 

nwlivewire

PEB Forum Regular Member
PEB Forum Veteran
As I understand it,

The most you can get with CRDP is all of your VA and whatever the "high three" is for your military retirement.

If you came into the service (to include DEP time) PRIOR to 08 SEP 1980, you retirement is calculated under Final Pay.

Did you sign your very first military contract prior to 08 SEP 1980? If so, you will fall under final pay (which is a few more dollars better than High 3). The date you signed is what counts - not the first day you went to Basic.

Yes. You were PDRL'ed with 75% Army. But your regular retirement is 62%.

So you will be able to get all your 62% (minus taxes), plus all your VA (tax free).

That's my understanding.

Others will chime in shortly if I'm wrong on this!

There are a few states that do not state tax military retirement. I know Texas and Washington State are a couple of them that don't state tax your military retirement.

The Feds - we have them always.... unless you qualify for CRSC.

CRSC is combat/combat-related pay and is non-taxable.

V/R,
nwlivewire

OK. I found the exact Federal law.

It's easy to read (thank God!).

It is in the Financial Management Regulation

Volume 7B

Chapter 64

DoD7000.14-R

Page 64-4

6404 MONTHLY PAYMENT AMOUNT

640401. SPECIAL RULE FOR DISABILITY RETIREMENT

"...., A MEMBER WITH AN AMOUNT OF RETIRED PAY REMAINING AFTER OFFSET OF VA DISABILITY COMPENSATION THAT IS GREATER THAN THE AMOUNT CALCULATED FOR YEARS OF SERVICE, IS NOT ELIGIBLE FOR ANY INCREASE OF PAYMENT OF RETIRED PAY UNDE THE CRDP PROGRAM."

So it looks like what I said was correct.

nwlivewire
 

stepdale

PEB Forum Regular Member
Registered Member
"...., A MEMBER WITH AN AMOUNT OF RETIRED PAY REMAINING AFTER OFFSET OF VA DISABILITY COMPENSATION THAT IS GREATER THAN THE AMOUNT CALCULATED FOR YEARS OF SERVICE, IS NOT ELIGIBLE FOR ANY INCREASE OF PAYMENT OF RETIRED PAY UNDE THE CRDP PROGRAM."

So it looks like what I said was correct.

nwlivewire[/QUOTE]

Thank you, that gives me the exact regulation I need to inform others of this as well as something to engage with MOAA and DAV.
 

T-man

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
Here's a CRDP/E7 single rate example extracted from link below, hopefully this helps:

http://themilitarywallet.com/concurrent-receipt-military-retirement-pay/

Simplified example:
Let’s make a simple example of a retired E-7 with 20 years service. The base pay for an E-7, according to the 2014 pay scale, would be $4,372. At 50%, the retirement pay would be $2,186. The following chart shows how valuable this benefit is (assuming the retiree elects to waive a portion of his or her retirement pay in order to receive the VA disability pay, which is tax exempt):
  • 0% disability: Base pay = $2,186
  • 10% Disability: $2,055 Base Pay, $131 VA Disability Pay; $2,186 Total
  • 20% Disability: $1,927 Base Pay, $259 VA Disability Pay; $2,186 Total
  • 30% Disability: $1,785 Base Pay, $401 VA Disability Pay; $2,186 Total
  • 40% Disability: $1,610 Base Pay, $576 VA Disability Pay; $2,186 Total
  • 50% Disability: $2,186 + $822 = $3,008
  • 60% Disability: $2,186 + $1,041 = $3,227
  • 70% Disability: $2,186 + $1,302 = $3,488
  • 80% Disability: $2,186 + $1,526 = $3,712
  • 90% Disability: $2,186 + $1,714 = $3,900
  • 100% Disability: $2,186 + $2,858 = $5,044
Notes about these assumptions:
  • All military retirement benefits are considered taxable income (some states may not tax retirement benefits or other income, but the federal government does).
  • All VA Disability Compensation Benefits are non-taxable income at all levels
  • The disability benefits are for a retiree with no dependents. The Concurrent Retirement and Disability Pay benefit is worth much more when the retiree has dependents.
 

nwlivewire

PEB Forum Regular Member
PEB Forum Veteran
You should get a combined amount from the VA and DoD the equals all of your VA and the amount of retirement based on length of service.

Mike
Yep. That's essentially what the above FMR says, but it says it in financial legaleze, making it just a little harder for most folks to understand.

Thanks maparker for writing in plain English!

V/R,
nwlivewire
 

Outty5000

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
"...., A MEMBER WITH AN AMOUNT OF RETIRED PAY REMAINING AFTER OFFSET OF VA DISABILITY COMPENSATION THAT IS GREATER THAN THE AMOUNT CALCULATED FOR YEARS OF SERVICE, IS NOT ELIGIBLE FOR ANY INCREASE OF PAYMENT OF RETIRED PAY UNDE THE CRDP PROGRAM."

So it looks like what I said was correct.

nwlivewire
Thank you, that gives me the exact regulation I need to inform others of this as well as something to engage with MOAA and DAV.[/QUOTE]
If a member with 20 years all active duty elects to do the CRSC, is it possible to collect the full 75% DOD rating as well as CRSC benefits if approved?
 

maparker

Moderator
PEB Forum Veteran
Registered Member
No, both CRDP and CRSC will deduct the amount the disability retirement exceeds the amount of the length of service retirement.

Mike
 

Outty5000

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
Is there any type of benefit for a 20 year active-duty medical retiree to get a 75% DOD rating versus 50% longevity for pay purposes? I am undecided if I want to stick around in the Army to fight for the 75% that I deserve. If there is no value then I not fight for 75%.
 

Jason Perry

Benevolent Leader
Site Founder
Staff Member
PEB Forum Veteran
Registered Member
The additional 25% of pay?

You have to look at the pay scales to see how things work out for an individual and take into account both VA ratings- really payments- and Concurrent Receipt issues. For some folks, additional percentages above 30% likely won't matter much (and, if they have 20 years of service, they would actually be rated at 50%). But, for some, it makes a big difference.
 

AFretired2014

Member
Registered Member
So, I have a question about DoD Disability retirement. If a person is on TDRL or PDRL wouldn't that be condisered disability and like the VA shouldn't the pay be tax free? Could someone please explain the difference to me.

Thank you
 

Ed Mercanti

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
So, I have a question about DoD Disability retirement. If a person is on TDRL or PDRL wouldn't that be condisered disability and like the VA shouldn't the pay be tax free? Could someone please explain the difference to me.

Thank you
The TDRL and PDRL are retirements. They are due to physical unfitness, but they are still retirements and, as such, taxable.
 

maparker

Moderator
PEB Forum Veteran
Registered Member
They are not taxable if the unfitting condition is combat related or you were obligated to join the military before September 1975.

Mike
 

Jason Perry

Benevolent Leader
Site Founder
Staff Member
PEB Forum Veteran
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In terms of dollars, not percentages....the two systems pay out differently.
 

maparker

Moderator
PEB Forum Veteran
Registered Member
I have cases where the amount of disability retirement is greater than the amount of VA and the LOS retirement amount combined.

Mike
 
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