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80% DoD - 100% VA - Retirement Pay Question.

Bill Wall

PEB Forum Regular Member
Registered Member
I'm confused and need some help. No one can answer this for me. I final out in a few weeks, and trying to buy a house.


--Average high three for basic pay - 5955 according to myarmybenefits calculator
--DoD disability percentage - 80% Permanent V/1 - Yes, V/3 Yes
--Active duty years and months - 26 years 8 months 5 days
--VA compensation - 100%., 3375; no spouse; 1 child, 1 SMCs - K.
--Projected or approved CRSC percentage by your service. - Not applied yet
--Whether you qualify for another type retirement and whether you transitioned to the blended retirement system - No other retirement qualified and I did not transition to BRS
--Did you receive a REDUX/CSB payment? - Yes, CSB Payment
 

RonG

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Hello @Bill Wall ,

Your retired pay situation is complex and I only have a few minutes now. I'll return in the morning to complete come of the computations.

Factors:
1. Your DoD disability pay will be 5955 (your figure) x 75% (maximum percentage) = DoD disability retired pay
2. Your DoD disability retired pay will be reduced by the amount of your VA compensation. Your VA comp is 3375 + 111.74 per the info you provided.
So...thus far: 5955 X 75% (which is higher than longevity percentage) = 4466.25 Ch61 retired pay, minus (3375 + 111.74) VA Comp amt = 979.51 residual retired pay you keep
3. Based on the information you provided you are entitled to CRDP which restores waived retired pay; however, those who accepted the REDUX/CSB have their CRDP computed using the REDUX formula.
4. CSB REDUX Retired Pay Calculation for CRDP
The percent multiplier reduced is by:
  • 1 percent for each full year of creditable service less than 30, and
  • 1/12th of 1 percent for each full month of creditable service less than a full year.
This will also affect your retired pay by reducing the cost of living adjustments (COLA) by one percent.

This reduction remains in effect up to the age of 62. Once you reach age 62, your retired pay will be restored to the same amount paid under the High-3 System. Full COLA rates will be applied to your new computation, but the COLA will continue to be applied at the reduced rate each year following.

Disability Retirees and Reserve/Guard members retiring at age 60 (or younger in some cases) are exempt from all provisions of the CSB/REDUX provisions except the 1 percent COLA reduction. HOWEVER, The CRDP computation uses the REDUX formula. (DFAS determination will be provided later).

5. The CRDP discussed above when added to the residual retired pay shown at item 2 cannot exceed the longevity portion of retired pay using the REDUX formula.

6. Basically, when considering CRDP in your case, you will receive:
a. VA compensation = 3375 + 111.74 per the info you provided
b. DFAS residual residual retired pay and CRDP = an amount equal to the longevity portion of your retired pay using REDUX formula.

7. Determination by DFAS in 2017:

Question:
A recurring question that I see on various veteran websites concerns how CRDP is calculated when a veteran with more than 20 years service has been retired under Chapter 61 but previously opted for the REDUX system.

When the VA disability compensation exceeds the chapter 61 retirement amount, is the amount restored by CRDP calculated at the reduced REDUX retirement factor or at the 2.5% per year of service rate used for Chapter 61 purposes?

For example, a retiree has 20 years service and DOD disability finding of 30% disability. The retiree is retired at 50% based on 2.5% per year of service IAW chapter 61. All of his retirement is offset by his VA compensation. His REDUX retirement would be 40%. Is CRDP dollar amount based on the 40% or the 50% factor?

Answer:
The CRDP dollar amount is based on the 40% REDUX retirement. If you would like an audit of your account or have any further questions they may be directed in writing to:

----
Ron
edited to add: My remarks do not address CRSC which will have similar limitations.
 

Bill Wall

PEB Forum Regular Member
Registered Member
Thanks, Ron.

I’m getting closer to figuring it out. A few number changes; estimating $5928 high-3, $3375 is my total VA, and REDUX, I am using 0.6234.

DoD disability pay will be 5928 x 75% (maximum percentage) = 4446 ch61 retired pay
4446.25 Ch61 retired pay, minus 3375 VA Comp amt = 1071 residual retired pay you keep
5928 x 0.6234 = 3701.74
3701.74 - 1071 = 2630.74

DFAS:
2630.74 - CDRP
1071.00 - residual
3375.00 - VA
7076.74

OR

Years of credible service; 5928 x 0.6234 = 3701.74 ch61 retired pay
3701.74 ch61 retired pay, minus 3375 VA Comp act = 326.74 residual
3701.74 - 326.74 = 3375

DFAS:
3375 - CDRP
326.74 - residual
3375 - VA
7076.74

That being said, do I have the option to have DFAS calculate using my years of credible service (REDUX percentage) instead of my disability percentage? There is literally no change in my total pay, but that would give me less disposable income. There are personal reasons this benefits me.
 

RonG

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VA
3,263.74 With child Plus 111.74 SMC-K = 3374.74 total VA comp.(3375 for computaction purposes as you show...I misunderstood your earlier presentation)

More later...Ron
 

RonG

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Hello @Bill Wall ,

Re: "That being said, do I have the option to have DFAS calculate using my years of credible service (REDUX percentage) instead of my disability percentage?"

Yes, that is my understanding.

------------

DFAS (without discussion of REDUX):
DISABILITY RETIREMENT
The multiplier for disability retired pay is either:
  • 2.5 percent for each year of service, or
  • disability percentage assigned by the service at the time you retire

Either way, the multiplier is limited to 75 percent by law. If you are on the Temporary Disability Retired List, the minimum multiplier is 50 percent while on the TDRL.


DFAS uses the method that results in the largest payment. But if you’d like to choose the other method, please send DFAS your request in writing.

--------------------------------------


I did not re-compute your estimates. It appears you have a good handle on it. Incidentally, CRSC (rather than CRDP) is not divisible with a former spouse.

Ron
 
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Bill Wall

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Registered Member
Thank you Ron. I’ve learned a lot. Disposable income is another odd question. This is from DFAS.


Maximum Payment Amount​

Disposable retired pay is gross retired pay less authorized deductions. The authorized deductions depend on the effective date of the parties’ divorce, dissolution, annulment or legal separation. If the date was on or after February 3, 1991, the authorized deductions are:

  • Amounts owed to the United States for previous overpayments of retired pay and for recoupments required by law resulting from entitlement to retired pay.
  • Forfeitures of retired pay ordered by court-martial.
  • Amounts of retired pay waived in order to receive compensation under Title 5 (federal civilian employment) or Title 38 (Department of Veterans Affairs) of the United States Code.
  • The amount of the member's retired pay under 10 U.S. Code Chapter 61 (Retirement or Separation for Physical Disability) computed using the percentage of the member's disability on the date when the member was retired (or the date on which the member's name was placed on the temporary disability retired list).
 

RonG

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Hello @Bill Wall

You can read about CRSC at:
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 63
https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_63.pdf <---LINK

Ron

edited to add comment regarding your computations:
The combination of residual retired pay and CRDP cannot exceed longevity portion of retired pay (using REDUX in your case).
CRDP is retired pay, restored.
Formula: longevity portion of retired pay minus residual retired pay = maximum possible CRDP

CRDP does not restore offset retired pay that is in excess of the longevity portion.
 
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RonG

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@RonG can I ask why you would want them to do the calculations based off years in service?
Hello,

General. Retired pay for Chapter 61 retirees is usually (initially) computed using the higher of the DoD disability percentage or the Longevity Multiplier. The retiree can choose the lesser if she/he wants...for their own reasons.

CRDP can never be more than the longevity portion of retired pay. In other words, CRDP does not restore the waived retired pay that is in excess of the longevity.

CRSC for CH 61 is the lesser of the approved CRSC percentage (rates found in VA comp tables) OR the longevity portion of retired pay. In most instances the longevity is the ceiling.

I think there are between 700 to 1000 estimates I’ve done in this forum…another 4K at another site. You can use this site to see plenty of examples.

REDUX computations are more complicated.

Ron
 
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