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CDRP/VA Compensation Confusion

TULIP_1618

PEB Forum Regular Member
Registered Member
All:

I promise I have searched the forum for this answer! I recently medically retired from AD Army in June. I was under the impression that I was only receiving VA Disability Compensation. However, today I received a letter from DFAS essentially saying that I will be receiving roughly $3000 in retirement pay. I did not think this was the case. MyPay indicated the same thing. I am fairly confused. I did not think I was eligible for CDRP. I am a little fuzzy on what does and doesn't qualify you.

A bit of a breakdown.
I am 100% VA
90% DoD (highest single rating for DoD is 70% - unsure if that matters)
Medically retired via PEB findings
11 yrs ADSM as an E7

My apologies if this is redundant. I am utterly confused at the moment. Thank you!
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
All:

I promise I have searched the forum for this answer! I recently medically retired from AD Army in June. I was under the impression that I was only receiving VA Disability Compensation. However, today I received a letter from DFAS essentially saying that I will be receiving roughly $3000 in retirement pay. I did not think this was the case. MyPay indicated the same thing. I am fairly confused. I did not think I was eligible for CDRP. I am a little fuzzy on what does and doesn't qualify you.

A bit of a breakdown.
I am 100% VA
90% DoD (highest single rating for DoD is 70% - unsure if that matters)
Medically retired via PEB findings
11 yrs ADSM as an E7

My apologies if this is redundant. I am utterly confused at the moment. Thank you!
Hello @TULIP_1618

Comments:

1. You are correct in that you are not eligible for CRDP which allows for concurrent receipt of both retired pay and VA compensation.

2. I suspect the letter you received was an automatically generated letter that follows the establishment of a retired account at DFAS.

3. In order for you to receive VA compensation, you would have had to agree to waive your retired pay dollar for dollar in the amount of VA compensation received.

4. The following pertains to the form on which you applied for VA compensation:
VA Form 526EZ Sep 2019

IMPORTANT INFORMATION ON MILITARY RETIRED PAY (Includes all Uniformed Services Retired Pay): Submission of this application constitutes a waiver of military retired pay in an amount equal to VA compensation awarded, if you are entitled to both benefits. Your retired pay may be reduced by the amount of VA compensation awarded. Receipt of the full amount of military retired pay and VA compensation at the same time may result in an overpayment, which maybe subject to collection. If you qualify for concurrent receipt of VA compensation and military retired pay, the waiver of retired pay will not apply. If you do not want to waive any retired pay to receive VA compensation, you should check the box in Item 26. Note that if you check the box in Item 26, you will not receive VA compensation, if granted. If you are currently in receipt of VA compensation and you check the box in Item 26, your VA compensation will be terminated, if you are also eligible for military retired pay. IMPORTANT: VA COMPENSATION PAY IS NON-TAXABLE. THEREFORE, VA COMPENSATION PAY MAY BE THE GREATER BENEFIT.
-------

If one wants to receive VA compensation, Block 26 should NOT be checked.

5. Recommend you review your retained copies of documents you signed in conjunction with your retirement processing to determine if the VA form was completed accurately. You can also call the VA at their customer service number and ask if the waiver is in place.

6. Finally, if the retired pay is more than the amount of VA compensation, you would get the keep the residual retired pay left over from the reduction in pay (i.e., the difference between the two types of payments).

Ron
 

Billrlott

Well-Known Member
Registered Member
There has been a lot of confusion with CRDP and CRSC. I have seen post on this site that have referenced MILITARY PENSION DIVISION: THE “EVIL TWINS” – CRDP AND CRSC" In this article it uses a Retired Earning Statement from 2006. This was part of the phase in period and it ran for 10 years and ended in 2013. The phase in period does not exist anymore. CRDP is both disability pay and retirement pay, disability pay is paid by the Veterans Affairs and the Retirement pay is paid by DFAS. The retirement pay is your disposable retired pay. Disposable retired pay under the USFSPA is divisible in a divorce. The disability pay is not divisible. CRDP is automatic for a Veteran over 20 years of service and a rating of 50% or more. I saw an earlier post from someone that imposed the individual might be a scumbag for not allowing his disability pay divisible in a divorce. Congress passed the USFSPA to protect the Veterans disability. Most veterans that receive disability cannot work, and their only source of income is the disability pay. Again CRDP is automatic for a veteran over 20 years with a VA rating of 50% or more. There is no application to receive CRDP for a 20 year 50% veteran. A person can contact DFAS garnishment division and ask for a verification of what is included in there CRDP pay. You will have a VA waiver pay amount (Disability) and you will have Disposable pay amount (Retirement) Again the VA Waiver Disability pay cannot be awarded to an ex-spouse. The court cannot make the veteran indemnify the difference to an ex-spouse if her portion lowered due to CRDP. Howell v. Howell U.S. Supreme court ruling, disability pay is protected and intended only for the Veteran. Indemnification was ruled unconstitutional by the U.S. Supreme Court in a 8-0 ruling. One justice was out through this case. The VFW and attorney Carson Tucker presented this case and won the disability rights for veterans. If anyone on here needs help with a divorce case, please feel free to contact me. I will assist and help you. Most Veterans don't know their right with this matter. Attorneys and Judges lack the knowledge and will screw the veteran out of his or her disability pay. There has been great injustices done by the courts.
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
Hello,

It is difficult to read your post. Is there a question included?

Ron
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
Re: Concurrent Retirement and Disability Payment (CRDP)

Comment: CRDP paid by DFAS is Retired Pay itself. In fact, for those who receive CRDP, it is included in the gross retired pay on page one of the DFAS RAS. Pay two of the RAS shows the amount of gross retired pay that is CRDP (a restoration of retired pay). CRDP is taxable...period. VA compensation is not taxable. CRSC is not taxable since it a replacement of waived retired pay. CRDP restores waived retired pay.

CRDP Semantics: In a broad sense, CRDP is a program involving both the DFAS and the VA. The DFAS has a payment item that has the name, "CRDP." It is a restoration of waived retired pay. The VA pays VA compensation. They also use the term "CRDP" when discussing retroactive VA compensation for retirees also receiving CRDP from DFAs.
CRDP has several faces. It is a program; it is a payment item for DFAS; and it is term used for retroactive VA compensation by the VA.

DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 64
VOLUME 7B, CHAPTER 64: “CONCURRENT RETIREMENT AND DISABILITY PAYMENT (CRDP)

6402 ELIGIBILITY
--640201. Qualified Retiree A qualified retiree must be a member or former member of the Uniformed Services who is entitled for any month to both retired pay and VA disability compensation that is based on a qualifying service-connected disability. [Note: Those with Temporary Early Retirement Act (TERA) and have a VA disability rating of 50 percent or greater qualify.]

--640202. Qualifying Service-Connected Disability A qualifying service-connected disability is a service-connected disability (or combination of service-connected disabilities) that the VA rates at 50 percent or higher.

--640203. Physical Disability Retirement Members retired for physical disability who have less than 20 years of service creditable for the purposes of computing retired pay are not eligible for CRDP.

--640204. Non-Regular Retired Pay Members eligible for retirement for non-regular service are not eligible to receive CRDP until they reach retirement age and have applied for and have become entitled to receive retired pay.

--6403 APPLICATION A member is not required to submit an application to receive CRDP payments. The Defense Finance and Accounting Service (DFAS) will establish procedures to ensure that qualified retirees receive CRDP to which they are entitled pursuant to Title 10, U.S.C., section 1414

640502. Relation to Regular Retired Pay As a restoration of retired pay, CRDP remains subject to the requirement to make direct payment of retired or retainer pay as property of a former spouse in compliance with court orders. Receipt of CRDP does not alter or affect any coverage under the Survivor Benefit Plan (SBP) but is available for deduction of any SBP premiums otherwise due. If a member has sufficient CRDP to cover SBP premiums, then SBP premiums will be deducted from CRDP. CRDP is also subject to a Treasury offset to recover a debt owed to the United States, as well as garnishment for child support or alimony. CRDP is subject to any other action or process, such as allotments, that applies to retired pay generally. 640503. Taxability The CRDP entitlement represents the ability of an eligible military retiree to receive both retired pay and VA disability compensation without regard to the waiver and offset requirement in 38 U.S.C. §§ 5304 and 5305. Accordingly, payments of CRDP are payments of retired pay and are taxable.

Additional CRDP information is at: https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_64.pdf <---LINK

[Note: The phase-in of CRDP ended long ago.]

===================================
For those interested in CRSC, see the following: A Supplement to CRSC Information <---LINK

Ron
cc: @Jason Perry @chaplaincharlie
 
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ldvorak

PEB Forum Regular Member
Registered Member
Ok now I am totally confused. AD members who go through the MEB process and have over 20 yrs can be medically retired. If their DoD disability rating is high enough that their DFAS retirement pay is calculated off that percentage vs time in service they are Chapter 61 retirees. If their VA rating is over 50 % they qualify for CRDP. They get DFAS $ with a VA offset and VA $. None of it is considered Disposable. None of it is a marital asset under USFSPA
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
Ok now I am totally confused. AD members who go through the MEB process and have over 20 yrs can be medically retired. If their DoD disability rating is high enough that their DFAS retirement pay is calculated off that percentage vs time in service they are Chapter 61 retirees. If their VA rating is over 50 % they qualify for CRDP. They get DFAS $ with a VA offset and VA $. None of it is considered Disposable. None of it is a marital asset under USFSPA
Personnel who qualify for a regular retirement (i.e,. 20 AD years) CAN receive a medical retirement and receive CRDP not to exceed the longevity portion of their retired pay if they are otherwise qualified. The same of true of those who quality for a non-regular retirement (reserve/NG), but they must wait until they attain the age requirement.

Continuing on...the regular retirement example will have his/her retired pay reduced by the amount of VA compensation received. There could be residual retired pay remaining.
The combination of residual retired pay and CRDP cannot exceed the dollar amount of the longevity portion of retired pay.

From:
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 64
VOLUME 7B, CHAPTER 64: “CONCURRENT RETIREMENT AND DISABILITY PAYMENT (CRDP)

640502. [CRDP] Relation to Regular Retired Pay As a restoration of retired pay, CRDP remains subject to the requirement to make direct payment of retired or retainer pay as property of a former spouse in compliance with court orders. Receipt of CRDP does not alter or affect any coverage under the Survivor Benefit Plan (SBP) but is available for deduction of any SBP premiums otherwise due. If a member has sufficient CRDP to cover SBP premiums, then SBP premiums will be deducted from CRDP. CRDP is also subject to a Treasury offset to recover a debt owed to the United States, as well as garnishment for child support or alimony. CRDP is subject to any other action or process, such as allotments, that applies to retired pay generally. 640503. Taxability The CRDP entitlement represents the ability of an eligible military retiree to receive both retired pay and VA disability compensation without regard to the waiver and offset requirement in 38 U.S.C. §§ 5304 and 5305. Accordingly, payments of CRDP are payments of retired pay and are taxable.

Note: CRDP never restores waived DoD disability retired pay. It restores only the waived longevity portion of retired pay.

I am not an attorney so questions about whether your pay must be shared with a former spouse are best answered by DFAS or one's attorney.
One method by which one can submit questions to DFAS is AskDFAS: https://corpweb1.dfas.mil/askDFAS/welcome.action <---LINK

Ron
 
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RonG

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Q&A--DFAS, CRDP for Medical Retiree with 20 Years Active Duty, Payments to Former Spouse

Message submitted to DFAS thru AskDFAS

July 31, 2021

This question does not pertain to me; I am assisting other veterans. The question pertains to court order for division of retired pay with a former spouse and the retiree is a Chapter 61 disability retiree who also qualified for a Regular-20 years active duty retirement. He is qualified for CRDP since his VA rating is 50% or more. The DFAS reduces his retired pay by the amount of his VA compensation and CRDP restores the waived retired pay not to exceed the longevity portion of his retired pay. Although he received a disability retirement, his entire gross retired pay is made up of CRDP based on his active duty years earned toward a regular retirement. Question: Is the CRDP in this type case divisible with a former spouse?


August 3, 2021

Dear xxxx,

CRDP is in essence retired pay since it is the member's retired pay restored rather than being waived for the VA entitlement. CRDP is subject to the former spouse division of pay under the USFSPA. CRSC, however, is not subject to the division of pay under the USFSPA.

Please contact our Garnishment Operations Directorate for additional questions regarding a former spouse portion of pay under the USFSPA if and when the retiree is medically retired with a disability percentage by his/her Branch of Service by calling 888-332-7411, option 3, between 8am and 5pm EST and speaking with a Paralegal.
Thank you immensely for your service and for allowing us to assist you today with your Retired Pay Account. We are committed to providing quality service to our customers.

If you have any questions or require additional information, please contact a Representative at 1-888-332-7411 or 216-522-5096, options 4-2-4 and 2. Customer Service Representatives are available Monday through Friday from 8:00 a.m. to 5:00 p.m. EST.

Sincerely,

DFAS-CL
=========
ADDENDUM, 3 AUGUST 2021

I called 888-332-7411, option 3 as suggested in the reply. During the discussion, I was told that CRDP paid under the circumstances I presented in my initial question IS NOT subject to division of retired pay with a former spouse. So...recommend anyone with similar issues should contact DFAS for the clarification.

Ron
 
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