This week’s DES Outrage of the Week will discuss yet another DoD decision that does the least for our wounded warriors. It involves how DoD calculates Combat Related Special Compensation (CRSC) for disability retirees. CRSC is a form of concurrent receipt. Concurrent receipt is a concept allowing military retirees to collect, without offset, both their DoD retirement pay earned by years of military service and their disability compensation from the Veterans Administration for service connected disability.
A longstanding law prevented military retirees from collecting both their military retirement pay and VA disability compensation. In 2003, those laws started changing with the introduction of CRSC and its counterpart, Concurrent Receipt of Disability Payments (CRDP). CRSC allows a military retiree to collect retirement and VA disability compensation for combat related disabilities rated as little as 10% disabling. CRSC is tax free and originally required all retires to have 20 years of service to qualify. CRDP allows a military retiree to collect retirement and VA compensation if their VA rating is 50% or more. CRDP is fully taxable. Length of Service (LOS) retirees with a 50% VA rating can collect CRDP regardless of the number of years served. Currently, there are over 57,000 LOS retirees with less than twenty year service. Disability retirees, however, currently require a minimum of 20 years service to collect CRDP. (Why Congress mandated a minimum of 20 years service only for disability retirees is a mystery.) All retirees must apply for CRSC but CRDP is automatically paid to qualified retirees. Retirees eligible for both CRSC and CRDP must choose from the two programs as they cannot collect from both simultaneously.
In the 2008 National Defense Authorization Act (NDAA) Congress expanded CRSC to retirees with less than 20 years of active service to include disability retirees. The CRSC calculation for a Chapter 61 disability retiree is not straightforward. By law, the amount of DoD disability retirement received in excess of the amount of retirement based on LOS, must be deducted in the CRSC calculation. When CRSC is properly calculated, a Chapter 61 disability retiree should collect amounts from DoD and the VA that equal the sum of his total VA compensation plus his retirement based on LOS, limited by the amount of VA compensation based on combat related conditions.
The key sentence in my explanation above is “By law, the amount of DoD disability retirement received in excess of the amount of retirement based on LOS must be deducted in the CRSC calculation.” The key word in the sentence is “received”. The amount of DoD disability retirement above the amount earned by LOS is considered “DoD disability compensation” vice retirement pay for career compensation. Congress has decreed such “DoD disability compensation” should continue to be offset by VA disability compensation. However, DoD’s CRSC calculation method deducts “DoD disability compensation” even if the disability retiree never receives any disability retirement pay. Most disability retirees never see any disability retirement payment from DoD because it is completely offset by their VA compensation. When DoD’s CRSC calculation deducts “DoD disability compensation” that was never received by the retiree, DoD effectively offsets the “DoD disability compensation” twice. The DoD CRSC calculation “glitch” affects some but not all Chapter 61 disability retirees whose VA compensation exceeds their DoD disability retirement. It really depends on the amount of disability retirement pay and the amount of the VA compensation for combat related conditions. In certain cases, like in example B below, the VA compensation amount is high enough to negate the impact of DoD’s double offset. The examples below will help illuminate how DoD currently calculates CRSC and how this method cheats some wounded warriors out of proper CRSC compensation.
Example A is a service member who has a DoD disability retirement amount that is higher that his VA compensation. His DoD retirement is $1,500 a month and his retirement amount based on LOS is $500 a month. His VA compensation is $1,000 a month, all combat related. His VA disability compensation offsets $1000 of his $1,500 DoD disability retirement pay. DoD calculates his CRSC as follows:
1. Total amount of DoD disability retirement: $1,500
2. Minus DoD retirement amount based on years of service: $500
3. Equals DoD "Disability Compensation": $1,000
4. Amount of VA compensation due for combat related disabilities: $1,000
5. Minus DoD "Disability Compensation” (line 3): $1,000
6. Equals Maximum CRSC amount: $0
The amount of CRSC due is smaller amount from line 2 and line 6. CRSC = $0
In this case, DoD’s calculation method works as intended for the goal of concurrent receipt. Even without qualifying for any CRSC, the service member continues to receive an amount ($1,500) that is equal to his total VA ($1,000) and the amount of DoD retirement based on LOS ($500).
Example B is a service member who has a DoD disability retirement that is less than his total VA compensation. His DoD retirement is also $1,500 a month and his retirement amount based on LOS is $500 a month. His VA compensation is $2,700 a month, all combat related. His VA compensation completely offsets his DoD disability retirement amount. DoD calculates his CRSC as follows:
1. Total amount of DoD disability retirement: $1,500
2. Minus DoD retirement amount based on years of service: $500
3. Equals DoD "Disability Compensation": $1,000
4. Amount of VA compensation due for combat related disabilities: $2,700
5. Minus DoD "Disability Compensation” (line 3): $1,000
6. Equals Maximum CRSC amount: $1,700
The amount of CRSC due is smaller amount from line 2 and line 6. CRSC = $500
In this case, DoD’s CRSC calculation also works as intended for the goal of concurrent receipt. The service member receives a total amount ($3,200) that is equal to his total VA ($2,700) and the amount of DoD retirement based on LOS ($500). In this case he receives $2,700 from the VA and $500 from DoD in the form of CRSC. His VA compensation amount for combat related conditions was sufficient to overcome the “glitch” in DoD’s CRSC calculation.
Example C is a real world case of a wounded warrior being cheated out of his CRSC due to the DoD calculation “glitch”. He is Army 1LT “Smokey Artz”, a Vietnam Nam vet. Smokey served 10 Years, 10 months and 27 days on active duty before being medically retired with an 80% combat related DoD disability rating. His DoD disability retirement pay is $2,894 and his retirement amount based on LOS is $1,050. Smokey receives $2,932 from the VA from a 100% scheduler rating, 80% of which is combat related. His VA disability compensation completely offsets his DoD disability retirement. Smokey was approved by the Army for CRSC with an 80% combat related rating. His VA disability compensation for his combat related injuries is $1,634. DoD calculates his CRSC as follows:
1. Total amount of DoD disability retirement: $2,894
2. Minus DoD retirement amount based on years of service: $1,050
3. Equals DoD "Disability Compensation": $1,844
4. Amount of VA compensation due for combat related disabilities: $1,634
5. Minus DoD "Disability Compensation” (line 3): $1,844
6. Equals Maximum CRSC amount: Negative $210 or $0
The amount of CRSC due is smaller amount from line 2 and line 6. CRSC = negative $210 ($0)
The total amount Smokey’s receives is his VA disability compensation of $2,932. His CRSC amount, due to the DoD CRSC calculation “glitch”, is $0. If DoD calculated CRSC properly, Smokey would have received a CRSC amount equal to his LOS retirement amount of $1,050. His total VA/DoD compensation should be $3,982, equal to his VA compensation ($2932) and his LOS retirement amount ($1,050). The DoD CRSC calculation “glitch” is cheating this wounded warrior out of more than a thousand dollars a month. Hundreds if not thousands of CRSC eligible wounded warriors are in the same boat.
Two years ago, I brought the DoD CRSC calculation “glitch” issue to the attention of Congress, DoD and the Military Officers Association of America (MOAA). MOAA spearheaded efforts to fix the problem. Congressional staffers and DoD officials both agreed that DoD’s CRSC calculation method was a problem. MOAA helped write a legislative proposal fix to the DoD CRSC calculation “glitch”. Senator Reid submitted the proposal as an amendment to the 2009 NDAA. The Senate combined this amendment with around a hundred other amendments to be passed as a single action. Passage would have included all of the amendments into the Senate’s version of the 2009 NDAA. Unfortunately, a single Senator objected to the “pork barrel” provisions included in the package of amendments. These provisions were completely unrelated to CRSC “glitch” issue. This single Senator’s objection killed the entire package of amendments.
Unfortunately, neither the House nor the Senate versions of the 2010 NDAA included a DoD CRSC calculation “glitch” fix. Apparently, the lack of offsets under PAYGO rules prevented any resolution of the CRSC calculation “glitch” issue. To date, I have not seen any efforts by either the House or the Senate to include a CRSC calculation “glitch” fix in the 2011 NDAA. Apparently the lack of spending offsets under PAYGO rules is once again the culprit in preventing a fix so that wounded warriors are properly compensated.
PAYGO rules are often used as an excuse by Congress not to take action. I have never considered PAYGO rules, which are often ignored by Congress, to be a valid reason not to pass wounded warrior related legislation. Congress never worried about PAYGO rules when it came to finding hundreds of billions of dollars to send America’s finest into harm’s way. But when it comes to passing wounded a warrior programs, suddenly PAYGO rules become an insurmountable obstacle. I have no issues with fiscal responsibility when it comes to Congressional spending. I have a problem with Congress’ funding priorities. Wounded warrior programs should not take a back seat to the vast majority items in the federal budget, let alone all the pork barrel ear marks and other budgetary waste. For example, Congress spends $25 billion annually maintaining unused or vacant federal properties. Are empty buildings really more important than people, especially wounded warriors? Not in my book.
It is apparently is too politically difficult for Congress to establish funding priorities across the entire federal budget. When initiatives like fixing the CRSC calculation “glitch” go unfunded, Congress is telling wounded warriors that they are less important than everything else in the federal budget. There are certainly higher priorities in the federal budget but there is no way Congress can state that all federally funded initiatives have a higher priority than taking proper care of our wounded warriors.
Congress also apparently believes that the long overdue expansion of CRDP to Chapter 61 disability retirees will offset the need to fix the CRSC “glitch”. This is only partially true. Certainly some Chapter 61 disability retirees would do better under CRDP thus making their CRSC payments moot as a military retiree cannot draw from both programs. However, some wounded warriors would do better under a properly calculated CRSC program. We owe it to our wounded warriors to give them proper access to both of these programs.
Michael Parker
LTC, USA (Retired)
Wounded Warrior Advocate
A longstanding law prevented military retirees from collecting both their military retirement pay and VA disability compensation. In 2003, those laws started changing with the introduction of CRSC and its counterpart, Concurrent Receipt of Disability Payments (CRDP). CRSC allows a military retiree to collect retirement and VA disability compensation for combat related disabilities rated as little as 10% disabling. CRSC is tax free and originally required all retires to have 20 years of service to qualify. CRDP allows a military retiree to collect retirement and VA compensation if their VA rating is 50% or more. CRDP is fully taxable. Length of Service (LOS) retirees with a 50% VA rating can collect CRDP regardless of the number of years served. Currently, there are over 57,000 LOS retirees with less than twenty year service. Disability retirees, however, currently require a minimum of 20 years service to collect CRDP. (Why Congress mandated a minimum of 20 years service only for disability retirees is a mystery.) All retirees must apply for CRSC but CRDP is automatically paid to qualified retirees. Retirees eligible for both CRSC and CRDP must choose from the two programs as they cannot collect from both simultaneously.
In the 2008 National Defense Authorization Act (NDAA) Congress expanded CRSC to retirees with less than 20 years of active service to include disability retirees. The CRSC calculation for a Chapter 61 disability retiree is not straightforward. By law, the amount of DoD disability retirement received in excess of the amount of retirement based on LOS, must be deducted in the CRSC calculation. When CRSC is properly calculated, a Chapter 61 disability retiree should collect amounts from DoD and the VA that equal the sum of his total VA compensation plus his retirement based on LOS, limited by the amount of VA compensation based on combat related conditions.
The key sentence in my explanation above is “By law, the amount of DoD disability retirement received in excess of the amount of retirement based on LOS must be deducted in the CRSC calculation.” The key word in the sentence is “received”. The amount of DoD disability retirement above the amount earned by LOS is considered “DoD disability compensation” vice retirement pay for career compensation. Congress has decreed such “DoD disability compensation” should continue to be offset by VA disability compensation. However, DoD’s CRSC calculation method deducts “DoD disability compensation” even if the disability retiree never receives any disability retirement pay. Most disability retirees never see any disability retirement payment from DoD because it is completely offset by their VA compensation. When DoD’s CRSC calculation deducts “DoD disability compensation” that was never received by the retiree, DoD effectively offsets the “DoD disability compensation” twice. The DoD CRSC calculation “glitch” affects some but not all Chapter 61 disability retirees whose VA compensation exceeds their DoD disability retirement. It really depends on the amount of disability retirement pay and the amount of the VA compensation for combat related conditions. In certain cases, like in example B below, the VA compensation amount is high enough to negate the impact of DoD’s double offset. The examples below will help illuminate how DoD currently calculates CRSC and how this method cheats some wounded warriors out of proper CRSC compensation.
Example A is a service member who has a DoD disability retirement amount that is higher that his VA compensation. His DoD retirement is $1,500 a month and his retirement amount based on LOS is $500 a month. His VA compensation is $1,000 a month, all combat related. His VA disability compensation offsets $1000 of his $1,500 DoD disability retirement pay. DoD calculates his CRSC as follows:
1. Total amount of DoD disability retirement: $1,500
2. Minus DoD retirement amount based on years of service: $500
3. Equals DoD "Disability Compensation": $1,000
4. Amount of VA compensation due for combat related disabilities: $1,000
5. Minus DoD "Disability Compensation” (line 3): $1,000
6. Equals Maximum CRSC amount: $0
The amount of CRSC due is smaller amount from line 2 and line 6. CRSC = $0
In this case, DoD’s calculation method works as intended for the goal of concurrent receipt. Even without qualifying for any CRSC, the service member continues to receive an amount ($1,500) that is equal to his total VA ($1,000) and the amount of DoD retirement based on LOS ($500).
Example B is a service member who has a DoD disability retirement that is less than his total VA compensation. His DoD retirement is also $1,500 a month and his retirement amount based on LOS is $500 a month. His VA compensation is $2,700 a month, all combat related. His VA compensation completely offsets his DoD disability retirement amount. DoD calculates his CRSC as follows:
1. Total amount of DoD disability retirement: $1,500
2. Minus DoD retirement amount based on years of service: $500
3. Equals DoD "Disability Compensation": $1,000
4. Amount of VA compensation due for combat related disabilities: $2,700
5. Minus DoD "Disability Compensation” (line 3): $1,000
6. Equals Maximum CRSC amount: $1,700
The amount of CRSC due is smaller amount from line 2 and line 6. CRSC = $500
In this case, DoD’s CRSC calculation also works as intended for the goal of concurrent receipt. The service member receives a total amount ($3,200) that is equal to his total VA ($2,700) and the amount of DoD retirement based on LOS ($500). In this case he receives $2,700 from the VA and $500 from DoD in the form of CRSC. His VA compensation amount for combat related conditions was sufficient to overcome the “glitch” in DoD’s CRSC calculation.
Example C is a real world case of a wounded warrior being cheated out of his CRSC due to the DoD calculation “glitch”. He is Army 1LT “Smokey Artz”, a Vietnam Nam vet. Smokey served 10 Years, 10 months and 27 days on active duty before being medically retired with an 80% combat related DoD disability rating. His DoD disability retirement pay is $2,894 and his retirement amount based on LOS is $1,050. Smokey receives $2,932 from the VA from a 100% scheduler rating, 80% of which is combat related. His VA disability compensation completely offsets his DoD disability retirement. Smokey was approved by the Army for CRSC with an 80% combat related rating. His VA disability compensation for his combat related injuries is $1,634. DoD calculates his CRSC as follows:
1. Total amount of DoD disability retirement: $2,894
2. Minus DoD retirement amount based on years of service: $1,050
3. Equals DoD "Disability Compensation": $1,844
4. Amount of VA compensation due for combat related disabilities: $1,634
5. Minus DoD "Disability Compensation” (line 3): $1,844
6. Equals Maximum CRSC amount: Negative $210 or $0
The amount of CRSC due is smaller amount from line 2 and line 6. CRSC = negative $210 ($0)
The total amount Smokey’s receives is his VA disability compensation of $2,932. His CRSC amount, due to the DoD CRSC calculation “glitch”, is $0. If DoD calculated CRSC properly, Smokey would have received a CRSC amount equal to his LOS retirement amount of $1,050. His total VA/DoD compensation should be $3,982, equal to his VA compensation ($2932) and his LOS retirement amount ($1,050). The DoD CRSC calculation “glitch” is cheating this wounded warrior out of more than a thousand dollars a month. Hundreds if not thousands of CRSC eligible wounded warriors are in the same boat.
Two years ago, I brought the DoD CRSC calculation “glitch” issue to the attention of Congress, DoD and the Military Officers Association of America (MOAA). MOAA spearheaded efforts to fix the problem. Congressional staffers and DoD officials both agreed that DoD’s CRSC calculation method was a problem. MOAA helped write a legislative proposal fix to the DoD CRSC calculation “glitch”. Senator Reid submitted the proposal as an amendment to the 2009 NDAA. The Senate combined this amendment with around a hundred other amendments to be passed as a single action. Passage would have included all of the amendments into the Senate’s version of the 2009 NDAA. Unfortunately, a single Senator objected to the “pork barrel” provisions included in the package of amendments. These provisions were completely unrelated to CRSC “glitch” issue. This single Senator’s objection killed the entire package of amendments.
Unfortunately, neither the House nor the Senate versions of the 2010 NDAA included a DoD CRSC calculation “glitch” fix. Apparently, the lack of offsets under PAYGO rules prevented any resolution of the CRSC calculation “glitch” issue. To date, I have not seen any efforts by either the House or the Senate to include a CRSC calculation “glitch” fix in the 2011 NDAA. Apparently the lack of spending offsets under PAYGO rules is once again the culprit in preventing a fix so that wounded warriors are properly compensated.
PAYGO rules are often used as an excuse by Congress not to take action. I have never considered PAYGO rules, which are often ignored by Congress, to be a valid reason not to pass wounded warrior related legislation. Congress never worried about PAYGO rules when it came to finding hundreds of billions of dollars to send America’s finest into harm’s way. But when it comes to passing wounded a warrior programs, suddenly PAYGO rules become an insurmountable obstacle. I have no issues with fiscal responsibility when it comes to Congressional spending. I have a problem with Congress’ funding priorities. Wounded warrior programs should not take a back seat to the vast majority items in the federal budget, let alone all the pork barrel ear marks and other budgetary waste. For example, Congress spends $25 billion annually maintaining unused or vacant federal properties. Are empty buildings really more important than people, especially wounded warriors? Not in my book.
It is apparently is too politically difficult for Congress to establish funding priorities across the entire federal budget. When initiatives like fixing the CRSC calculation “glitch” go unfunded, Congress is telling wounded warriors that they are less important than everything else in the federal budget. There are certainly higher priorities in the federal budget but there is no way Congress can state that all federally funded initiatives have a higher priority than taking proper care of our wounded warriors.
Congress also apparently believes that the long overdue expansion of CRDP to Chapter 61 disability retirees will offset the need to fix the CRSC “glitch”. This is only partially true. Certainly some Chapter 61 disability retirees would do better under CRDP thus making their CRSC payments moot as a military retiree cannot draw from both programs. However, some wounded warriors would do better under a properly calculated CRSC program. We owe it to our wounded warriors to give them proper access to both of these programs.
Michael Parker
LTC, USA (Retired)
Wounded Warrior Advocate
