CRSC Benefits over 20 years if 100%

RavenFan1980

Registered Member
Good day all,

Has anyone ever heard of an individual over 20 years who was Medical Retired, received CRDP as well as CRSC? I am well aware that you can not get both; therefore, the ultimate question would be, what benefits are there for a person with over 20 years (100% VA - CRDP) to file for CRSC? Or if there are there any tax advantages etc.?
 

chaplaincharlie

Staff Member
PEB Forum Lifetime Supporter
PEB Forum Veteran
Registered Member
Many people are eligible for both CRDP and CRSC. But as you said, you can only claim one. Like VA benefits, CRSC is non-taxable. When a member is eligible for both CRDP and CRSC, DFAS runs the tax numbers both ways and automatically elects the one that provides the member the most money. Included in DFAS's decision letter, it a form to fill out if the member want the other option for some (unknown) reason.
 

RonG

Staff Member
PEB Forum Veteran
Registered Member
There are retirees who select CRSC even when it provides a lower net payment.

Example, retiree with >20 years AD:
Approved CRSC @ 80% = $1587 (partial replacement of waived waived retired pay)—non-taxable
CRDP due to 90% VA rating = $1783 (full restoration of waived retired pay)—taxable

Reason: The retiree in this example has other taxable income in addition to his/her retired pay. I did this for a couple of years before being rated @100% and all combat related. In that situation, I determined that the benefits of taking the lower amount which was
non-taxable, outweighed the almost $200 lost because CRSC did not replace that portion of the VA offset.

Ron
 

RavenFan1980

Registered Member
Ron G,

Great explanation; however, how does CRSC benefit one who has completed over 20 years who is already at 100% CRDP. I ask because most advise individuals who fall under this example to file, but I don’t see the advantage. Am I missing something? Only true benefit I see is if CRSC entitlements exceed CRDP payments which I seen as being rare for those over 20.
 

RonG

Staff Member
PEB Forum Veteran
Registered Member
Ron G,

Great explanation; however, how does CRSC benefit one who has completed over 20 years who is already at 100% CRDP. I ask because most advise individuals who fall under this example to file, but I don’t see the advantage. Am I missing something? Only true benefit I see is if CRSC entitlements exceed CRDP payments which I seen as being rare for those over 20.
1. Benefits: As I explained earlier, CRSC not taxed; CRDP is taxed.

2. CRSC “entitlements” (inferred to mean gross rate) will never be higher than CRDP payments—the gross of each, however, can be the same. CRDP can be a higher rate than CRSC, depending upon the circumstances.

3. CRDP allows the full restoration of waived retired pay for regular retirees. CRSC replaces only the waiver of retired pay amount associated with approved combat related disabilities.

4. My example, a few posts earlier, shows an example where a retiree could benefit tax-wise, by taking a lower rate of CRSC (over a higher rate of CRDP). The most common situation where this would occur is when the retiree has other taxable income (I have other retirement income from a university). There are many possible senarios...

5. Your situation: @ 100% VA and CRDP, all your retired pay is taxed. With approved CRSC @ 100%, around $3000+ of your retired pay amount would be non-taxable. In other words, your taxable income would be reduced by ~$3K.

Ron
 
Last edited:

chaplaincharlie

Staff Member
PEB Forum Lifetime Supporter
PEB Forum Veteran
Registered Member
There are retirees who select CRSC even when it provides a lower net payment.

Example, retiree with >20 years AD:
Approved CRSC @ 80% = $1587 (partial replacement of waived waived retired pay)—non-taxable
CRDP due to 90% VA rating = $1783 (full restoration of waived retired pay)—taxable

Reason: The retiree in this example has other taxable income in addition to his/her retired pay. I did this for a couple of years before being rated @100% and all combat related. In that situation, I determined that the benefits of taking the lower amount which was
non-taxable, outweighed the almost $200 lost because CRSC did not replace that portion of the VA offset.

Ron
Excellent example of why DFAS includes a form to take the other option! Thanks for sharing.
 
data-matched-content-ui-type="image_stacked" data-matched-content-rows-num="3" data-matched-content-columns-num="1" data-ad-format="autorelaxed">
Top