Compensation

SCWO19

SCWO19

PEB Forum Regular Member
Registered Member
Just received my 199. Recommend PDRL which is wonderful and was rated 70% both Army/VA. I'm a Reservist and when my PEBLO estimated my compensation, the Army pay was $3340 (not eligible for CRSC). My VA pay is $1481.48. I know I can't receive both concurrently as this point, so my question is: Will I simply receive $3340 all taxed. Or will I receive VA Pay tax free and the difference of 3340-1481.48 which is $1858 (taxed). Sorry if this has been asked before, but I've seen answers vary so much I'd like to see what you all say.
 
Assuming you do not presently meet the requirements for a reserve retirement (including the age requirement), the following should occur (rough figures):

1. DoD disability retired pay (amt provided) 3340 - 1481 (offset) VA comp = ~1859 residual retired pay.
2. 1859 residual ret pay (taxable) + 1481 VA comp (nontaxable) = 3340 received each month

Note: This is a good example of why the belief "you get to choose one or the other and accept the higher of the two" is a fallacy. The actual process is the retired pay is reduced dollar for dollar in the amount of VA compensation received. Often, that reduction leaves residual retired pay. Of course one has to indicate they want to receive VA compensation and waive retired pay (in order to receive VA comp), BUT the waiver does not always take all the retired pay as shown in the computation above.

Ron
 
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Ron,

Thanks for the quick reply. You are correct, the fallacy of choosing between the two has been running rampant which is part of the reason I posed the question on the board. Thanks for the reassurance!
 
Congratulations on getting your ratings. BEst wishes as you continue through the process.
 
I"m thinking it'll be downhill from here...
 
RonG said:
Assuming you do not presently meet the requirements for a reserve retirement (including the age requirement), the following should occur (rough figures):

1. DoD disability retired pay (amt provided) 3340 - 1481 (offset) VA comp = ~1859 residual retired pay.
2. 1859 residual ret pay (taxable) + 1481 VA comp (nontaxable) = 3340 received each month

Note: This is a good example of why the belief "you get to choose one or the other and accept the higher of the two" is a fallacy. The actual process is the retired pay is reduced dollar for dollar in the amount of VA compensation received. Often, that reduction leaves residual retired pay. Of course one has to indicate they want to receive VA compensation and waive retired pay (in order to receive VA comp), BUT the waiver does not always take all the retired pay as shown in the computation above.

Ron
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I had my 199 counseling today, the PEBLO doesn't even know this? She's working on verifying it....wow!
 
Re: "I had my 199 counseling today, the PEBLO doesn't even know this? She's working on verifying it....wow! "

Please report the result of your next conversation with her on this matter.

Incidentally, I sent an email to HRC (Human Recourse Command, Army), this morning. It included questions about the "7200 points issue."

Ron
 
So she called back and did verify. Reservist will receive VA Comp tax free and the difference between the VA Pay and DoD Pay, so your calculation is correct. Appreciate the knowledge Ron!
 
SCWO19 said:
So she called back and did verify. Reservist will receive VA Comp tax free and the difference between the VA Pay and DoD Pay, so your calculation is correct. Appreciate the knowledge Ron!
Click to expand...
Thank you for your reply.

My thoughts: I think there is a vast number of retirees who received incorrect info during the transition process. Your experience with a transition facilitator is one of many (in my opinion).

Ron
 
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