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.]
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For those interested in CRSC, see the following: A Supplement to CRSC Information <---LINK
Ron
cc:
@Jason Perry @chaplaincharlie