Chapter 61? For Reservist

Hi,

I just received my DA 199. My disposition states that my condition is rated above 75% and permanent. It does not state that I am chapter 61 however. In which, here is my background:

US Army Reserves
CPT/O3E
24 years of service
5983 Total Points
100% VA Rating
Above 75% DoD Rating (70% is combat related)

I am reading a lot of materials, and it is unclear what I should expect and entitled to as well.


Therefore, my questions are

Am I eligible for disability retirement pay?

If so, when do i receive it?

If not, what do am I eligible for retirement payment?

Does this qualify me for chapter 61?

If so, what are the benefits of chapter 61?

Any help would be greatly appreciated, as I try to plan for the future.
 
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Sorry. Let me rephrase the comment above.


I just received my DA 199, and my disposition states that my condition is rated above 75% and permanent. However, it does not mention Chapter 61. Here’s my background:

- Affiliation: US Army Reserves
- Rank: CPT/O3E
- Years of Service: 24 years
- Total Points: 5,983
- VA Rating: 100%
- DoD Rating: Above 75% (70% combat-related)

I have been trying to understand what I should expect and what I am entitled to. Therefore, I have a few questions:

1. Am I eligible for disability retirement pay?

2. If so, when would I start receiving it?

3. If not, what retirement benefits am I eligible for?

4. Does my situation qualify for Chapter 61 retirement?

5. If so, what are the benefits of Chapter 61?

Any help would be greatly appreciated as I plan for the future. Thank you!
 
1. Yes
2. Assuming your were duty related IDES you would receive it a month or 2 after you get your retirement orders. Pay for retirement is in the arrears.
3. Also, if you have 20 good years meaning a 20 year letter you would qualify at age 60 for your Reserve Retirement at eligible age. Until then any VA compensation received will offset your chapter 61 pension.
4. Yes
5. Basically you get tricare for life for you and your family and your guaranteed floor for income is 75% of your HIGH 3. That's important because you will get that even if your VA compensation went to zero. Since you have 1 or more conditions that was found to be combat related your entire pension will be exempt from income taxes!

Max compensation is your earned longevity pension + VA compensation. If your chapter 61 pension isn't larger than the combination of those to things you are leaving money on the table until your reach the age to get your Reserve pension. The reason for this is due to the required VA compensation offsetting your chapter 61 retirement income. Look into CRSC. The goal is to get a high enough CRSC % to make up the difference. That is the cap for CRSC as you can't get more than that combination of your earned Reserve pension + VA compensation. In my wife's case she had 20 good years with 17AFS and about 6,200 points. She had 75% DOD and 100% VA but when you calculated her earned longevity pension + VA compensation and subtracted her chapter 61 pension she was losing out on $1,600 a month. So she applied for CRSC and was awarded 80% CRSC. Using VA pay tables that equaled about $2,400 so she got $1,600 for CRSC since that maxed her out for income. The big bonus is that she got everything she deserved from the month she was medically retired instead of having to wait for eligible age for her earned reserve retirement to qualify to get all of her Reserve earned pension + VA compensation.
 
Provis said:
1. Yes
2. Assuming your were duty related IDES you would receive it a month or 2 after you get your retirement orders. Pay for retirement is in the arrears.
3. Also, if you have 20 good years meaning a 20 year letter you would qualify at age 60 for your Reserve Retirement at eligible age. Until then any VA compensation received will offset your chapter 61 pension.
4. Yes
5. Basically you get tricare for life for you and your family and your guaranteed floor for income is 75% of your HIGH 3. That's important because you will get that even if your VA compensation went to zero. Since you have 1 or more conditions that was found to be combat related your entire pension will be exempt from income taxes!

Max compensation is your earned longevity pension + VA compensation. If your chapter 61 pension isn't larger than the combination of those to things you are leaving money on the table until your reach the age to get your Reserve pension. The reason for this is due to the required VA compensation offsetting your chapter 61 retirement income. Look into CRSC. The goal is to get a high enough CRSC % to make up the difference. That is the cap for CRSC as you can't get more than that combination of your earned Reserve pension + VA compensation. In my wife's case she had 20 good years with 17AFS and about 6,200 points. She had 75% DOD and 100% VA but when you calculated her earned longevity pension + VA compensation and subtracted her chapter 61 pension she was losing out on $1,600 a month. So she applied for CRSC and was awarded 80% CRSC. Using VA pay tables that equaled about $2,400 so she got $1,600 for CRSC since that maxed her out for income. The big bonus is that she got everything she deserved from the month she was medically retired instead of having to wait for eligible age for her earned reserve retirement to qualify to get all of her Reserve earned pension + VA compensation.
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Thank you.

Can you show me an example of the financial breakdown? Let’s use me as an example with the information above?

Current cpt/o3e high 3 base pay is $8,420. I do have a 20 year letter dated in 2019.
 
So your chapter 61 pension which is tax free would be $6,315 a month. To get that number I multiplied your DOD% max which by law is 75% times your high 3. Also, your high 3 is adding up all of your highest 36 months of base pay and then dividing by 36. So my guess is that you gave my your current base pay. If that's the case I am over estimating your chapter 61 pay since everyone gets pay bumps due to annual increases, hitting pay period increase every 2 years unless you hit cap on that & if you were promoted during the last 36 months.

So the chapter 61 pay is your floor like I said earlier. You get that no matter what even if VA compensation is zero. Now take that amount and subtract VA compensation. You didn't mention any information about dependents so I don't know what it will be. For an example in this scenario I am going to assume you are married with no kids. No SMC's or Aid & Attendance either. So VA at 100% would be $4,044 for married with no dependents or add ons such as SMC or aid & attendance.

So your DFAS check for your chapter 61 pay would show $6,315 - $4,044 VA = $2,271 pay. That is how much your check from DFAS will be. The rest will be sent from the VA. If your earned longevity pension is worth more than $2,271 you are losing money due to the VA offset. To calculate your earned longevity pension take points and divide by 360. It puts you at 41.25% (Assuming you are legacy pension. If BRS then you are at 33%). So .4125 X 8,420 HIGH 3 = $3,473.25 is the value of your earned longevity pension. Since that higher take $3,473 - $2,271 = $1,202 is the amount you are not getting due to VA offset. Based on VA tables you need to get 50% CRSC to claw back the money lost due to not reaching 20 AFS. If you don't get CRSC you will be losing out on that money until you reach eligible age for your Reserve Retirement.

Also, even if you were to lose out on that income you are in a much better position than some. That is because your DOD% was high at 75%. If it was at 50% lets say then your loss due to the VA offset would have been much greater.

Lastly, all of your income will be exempt from taxes. You won't need to file tax returns for it. Since your chapter 61 pension is exempt the $2,271 pay will be tax free. The VA is Tax free and lastly if you can get CRSC that income too will be tax free. So if you max out compensation by getting CRSC your potential net compensation is $7,517 which = just over 90K a year!

Look into options other than SBP. Its super expensive! My wife has similar income and the SBP premiums were going to be almost $400 a month. She decided to elect SBP up to the Threshold amount which is a low cost option. Instead of paying 6.5% to get only 55% payout you can pay 2.5% on that 55% payout but the threshold limit is low. Just over 1k. So it provides $600 in pay if you were to die. My wife had a 2 million term policy which is overkill in our situation but she got it while healthy and the premiums are only $145 a month. Even if you just 500k for a 10 year term that would suffice. Then take the difference in premiums between low cost threshold SBP + Term policy and SBP if you had 100% coverage and invest it. So if you are 100% VA for 10 straight years or 5 straight if 100% straight out of the military your spouse and children would qualify for DIC. That is a separate benefit from the VA so I would just get cheap SBP threshold coverage and a 10 year term policy with a private insurer and then once eligible for DIC you can drop private life insurance policy and I would keep the low cost SBP as an added income kicker since its only about $27 a month deducted from your chapter 61 retirement pay.
 
Provis said:
So your chapter 61 pension which is tax free would be $6,315 a month. To get that number I multiplied your DOD% max which by law is 75% times your high 3. Also, your high 3 is adding up all of your highest 36 months of base pay and then dividing by 36. So my guess is that you gave my your current base pay. If that's the case I am over estimating your chapter 61 pay since everyone gets pay bumps due to annual increases, hitting pay period increase every 2 years unless you hit cap on that & if you were promoted during the last 36 months.

So the chapter 61 pay is your floor like I said earlier. You get that no matter what even if VA compensation is zero. Now take that amount and subtract VA compensation. You didn't mention any information about dependents so I don't know what it will be. For an example in this scenario I am going to assume you are married with no kids. No SMC's or Aid & Attendance either. So VA at 100% would be $4,044 for married with no dependents or add ons such as SMC or aid & attendance.

So your DFAS check for your chapter 61 pay would show $6,315 - $4,044 VA = $2,271 pay. That is how much your check from DFAS will be. The rest will be sent from the VA. If your earned longevity pension is worth more than $2,271 you are losing money due to the VA offset. To calculate your earned longevity pension take points and divide by 360. It puts you at 41.25% (Assuming you are legacy pension. If BRS then you are at 33%). So .4125 X 8,420 HIGH 3 = $3,473.25 is the value of your earned longevity pension. Since that higher take $3,473 - $2,271 = $1,202 is the amount you are not getting due to VA offset. Based on VA tables you need to get 50% CRSC to claw back the money lost due to not reaching 20 AFS. If you don't get CRSC you will be losing out on that money until you reach eligible age for your Reserve Retirement.

Also, even if you were to lose out on that income you are in a much better position than some. That is because your DOD% was high at 75%. If it was at 50% lets say then your loss due to the VA offset would have been much greater.

Lastly, all of your income will be exempt from taxes. You won't need to file tax returns for it. Since your chapter 61 pension is exempt the $2,271 pay will be tax free. The VA is Tax free and lastly if you can get CRSC that income too will be tax free. So if you max out compensation by getting CRSC your potential net compensation is $7,517 which = just over 90K a year!

Look into options other than SBP. It’s super expensive! My wife has similar income and the SBP premiums were going to be almost $400 a month. She decided to elect SBP up to the Threshold amount which is a low cost option. Instead of paying 6.5% to get only 55% payout you can pay 2.5% on that 55% payout but the threshold limit is low. Just over 1k. So it provides $600 in pay if you were to die. My wife had a 2 million term policy which is overkill in our situation but she got it while healthy and the premiums are only $145 a month. Even if you just 500k for a 10 year term that would suffice. Then take the difference in premiums between low cost threshold SBP + Term policy and SBP if you had 100% coverage and invest it. So if you are 100% VA for 10 straight years or 5 straight if 100% straight out of the military your spouse and children would qualify for DIC. That is a separate benefit from the VA so I would just get cheap SBP threshold coverage and a 10 year term policy with a private insurer and then once eligible for DIC you can drop private life insurance policy and I would keep the low cost SBP as an added income kicker since its only about $27 a month deducted from your chapter 61 retirement pay.
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Sir. Thank you so much. This is very helpful, as I plan ahead. There isn’t much information, and the information is not definite. But this so much helpful.
 
Good afternoon.

I recently received my medical retirement order, and I am seeking clarification on the process for applying for disability retirement pay.

Below are the key details from my order:
  • Effective Date of Retirement: 15 March 2025
  • Date Placed on Retired List: 16 March 2025
  • Disability Status:
    • Incurred in the Line of Duty (LOD) as a direct result of Armed Conflict or an instrumentality of war during a war period: YES
    • Resulted from a combat-related injury as defined in 26 USC 104: YES
    • Incurred in the LOD in a combat zone or as a result of performing combat-related operations (DoD 7000.14-R, Vol. 7A, Sec. 020303b): YES
Despite these determinations, I have received conflicting information regarding my eligibility for disability retirement pay. The Retirement Services Offices (RSOs) have stated that I am not eligible for disability retired pay because I am not yet 60 years old and therefore not eligible for retired pay under the Reserve system.

I have searched the DFAS website but have not been able to find clear guidance on how to apply for disability medical retirement pay in my situation.

Additionally, I have already submitted my Combat-Related Special Compensation (CRSC) packet.

If anyone has experience navigating this process or can point me to the correct resources, I would greatly appreciate the guidance.

Thank you in advance for any assistance.
 
jamessong said:
Good afternoon.

I recently received my medical retirement order, and I am seeking clarification on the process for applying for disability retirement pay.

Below are the key details from my order:
  • Effective Date of Retirement: 15 March 2025
  • Date Placed on Retired List: 16 March 2025
  • Disability Status:
    • Incurred in the Line of Duty (LOD) as a direct result of Armed Conflict or an instrumentality of war during a war period: YES
    • Resulted from a combat-related injury as defined in 26 USC 104: YES
    • Incurred in the LOD in a combat zone or as a result of performing combat-related operations (DoD 7000.14-R, Vol. 7A, Sec. 020303b): YES
Despite these determinations, I have received conflicting information regarding my eligibility for disability retirement pay. The Retirement Services Offices (RSOs) have stated that I am not eligible for disability retired pay because I am not yet 60 years old and therefore not eligible for retired pay under the Reserve system.

I have searched the DFAS website but have not been able to find clear guidance on how to apply for disability medical retirement pay in my situation.

Additionally, I have already submitted my Combat-Related Special Compensation (CRSC) packet.

If anyone has experience navigating this process or can point me to the correct resources, I would greatly appreciate the guidance.

Thank you in advance for any assistance.
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RSO has no clue about this. Just ignore. If you medically retired with LOD you retire immediately just like AD. The Reserve people suck bc they give misinformation all the time.
 
jamessong said:
Good afternoon.

I recently received my medical retirement order, and I am seeking clarification on the process for applying for disability retirement pay.

Below are the key details from my order:
  • Effective Date of Retirement: 15 March 2025
  • Date Placed on Retired List: 16 March 2025
  • Disability Status:
    • Incurred in the Line of Duty (LOD) as a direct result of Armed Conflict or an instrumentality of war during a war period: YES
    • Resulted from a combat-related injury as defined in 26 USC 104: YES
    • Incurred in the LOD in a combat zone or as a result of performing combat-related operations (DoD 7000.14-R, Vol. 7A, Sec. 020303b): YES
Despite these determinations, I have received conflicting information regarding my eligibility for disability retirement pay. The Retirement Services Offices (RSOs) have stated that I am not eligible for disability retired pay because I am not yet 60 years old and therefore not eligible for retired pay under the Reserve system.

I have searched the DFAS website but have not been able to find clear guidance on how to apply for disability medical retirement pay in my situation.

Additionally, I have already submitted my Combat-Related Special Compensation (CRSC) packet.

If anyone has experience navigating this process or can point me to the correct resources, I would greatly appreciate the guidance.

Thank you in advance for any assistance.
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Also, you will get a document from DFAS about 6-8 weeks after medically retiring. Its call retirement rolls. It will explain your pay and break it down and what formula they used whether its your longevity earned pension or DOD%. They calculate it and give you whichever is the higher amount.
 
jamessong said:
Good afternoon.

I recently received my medical retirement order, and I am seeking clarification on the process for applying for disability retirement pay.

Below are the key details from my order:
  • Effective Date of Retirement: 15 March 2025
  • Date Placed on Retired List: 16 March 2025
  • Disability Status:
    • Incurred in the Line of Duty (LOD) as a direct result of Armed Conflict or an instrumentality of war during a war period: YES
    • Resulted from a combat-related injury as defined in 26 USC 104: YES
    • Incurred in the LOD in a combat zone or as a result of performing combat-related operations (DoD 7000.14-R, Vol. 7A, Sec. 020303b): YES
Despite these determinations, I have received conflicting information regarding my eligibility for disability retirement pay. The Retirement Services Offices (RSOs) have stated that I am not eligible for disability retired pay because I am not yet 60 years old and therefore not eligible for retired pay under the Reserve system.

I have searched the DFAS website but have not been able to find clear guidance on how to apply for disability medical retirement pay in my situation.

Additionally, I have already submitted my Combat-Related Special Compensation (CRSC) packet.

If anyone has experience navigating this process or can point me to the correct resources, I would greatly appreciate the guidance.

Thank you in advance for any assistance.
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BTW go back and educate the RSO people. You now qualify for 2 retirements. One is a medical retirement that will pay you right away starting on the dates of your orders. You also have earned a Reserve Retirement for which you are eligible at age 60. If you apply for CRSC and max out compensation you don't need your Reserve retirement. If that doesn't happen at age 60 you will get the value of your Reserve pension + all of your VA compensation.
 
Thank you so much. Will go back and let the RSO know with the updated information.

So, that means, I don't do anything? I just want until DFAS contacts me. Is that correct, Sir?
 
jamessong said:
Thank you so much. Will go back and let the RSO know with the updated information.

So, that means, I don't do anything? I just want until DFAS contacts me. Is that correct, Sir?
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As long as you out process and retirement services does their job there isn't anything you need to do. When you retire whether medically or regular there is a gap in pay. So save your money as it will take a while to get your first check. DFAS will get the information and send you that letter and begin to pay you on the 1st of each month. Since retirement pay is in the arrears you won't see a full paycheck until May 1st.
 
Provis said:
As long as you out process and retirement services does their job there isn't anything you need to do. When you retire whether medically or regular there is a gap in pay. So save your money as it will take a while to get your first check. DFAS will get the information and send you that letter and begin to pay you on the 1st of each month. Since retirement pay is in the arrears you won't see a full paycheck until May 1st.
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Thank you, Sir. That helps me a lot. I figured it would be an arrear payment, which just happens that it would be May 1, 2025.
 
In summary, this what it looks like for me.

Source​
Amount
Taxable?​
Chapter 61 Pension (DFAS after VA offset)
No​
VA Disability Compensation
No​
CRSC (Restored Combat-Related Pay)
No​
Total Monthly Pay
Fully Tax-Free​
[td width="98pt"]
$2,271​
[/td]​
[td width="98pt"]
$4,044​
[/td]​
[td width="98pt"]
$1,202​
[/td]​
[td width="98pt"]
$7,517​
[/td]​

Sorry to add more questions.

1. Would this be all tax-free income.

2. Since I have reduced age retirement, if I calculate everything correctly, my retirement age is 55 years old. Would that effect my retirement pay once I reach my retirement age at 55 years old? Or does it stay the same as above?
 
Since you hit 20 good years, you may not be able to do the medical retirement. I know on the Navy side of things if that happens, you end up with the short end of the stick on the financial side of things as well as healthcare. Good luck.
 
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