DOD-VA offset pay question

A

AL_Shep

PEB Forum Regular Member
Registered Member
I'm familiar with DOD-VA pay differences and when to apply one, the other, or both. But I'm coming up short in the search function for my question..

My situation: 100% DOD / 100% VA, PDRL. To make it easy, I'll go with $3500 VA and $5000 DOD. Meaning, $3500 will be tax-free VA pay, and then $1500 will be the remainder of taxed DOD pay. Total of $5000, most of which is VA/tax free. This much I can figure out, I just don't know to ensure I get to that point on the admin side.

My question...how do I ensure I'm getting the right amount prior to separating? M admin section has never discussed High-3 and what the DOD side should amount to (roughly $5000 by my calculations). I'm going in to review my DD-214 next week, should I just expect it to say 100% PDRL and DFAS figures out the rest? Or should there be a dollar # on there. I think I understand the VA side...upload my DD-214 once I separate and the proposed 100% will become official and payments will begin about 45 days after retirement. But who talks to DFAS to say that $3500 of my DOD pay will come from VA as non-taxable, so only pay the SM the remainder $1500 on the DOD side? I never spoke with my DES attorney because I didn't need to up until this point, but now I'm feeling lost. Thanks for anyone that can help.
 
Hello @AL_Shep

Using your scenario

1. You will receive $3500 from the VA. DFAS has nothing to do with this.
2. The high three average base pay is the total of your highest 36 months of base pay divided by 36. Computed by DFAS.
3. Your retired pay will be high three x 75% = retired pay computed by DFAS
4. Your retired pay will be reduced by the amount of your VA compensation (action by DFAS). If you have residual retired pay (e.g., 1500) you get to keep it.
5. The DFAS and the VA communicate via electronic means to ensure there is a waiver (for example) in place.
6. $3500 of your retired pay (VA offset amt) is not taxable or nontaxable . It has been waived and you receive VA compensation instead. VA comp =$3500

See DFAS web page “Is it taxable?” Defense Finance and Accounting Service > RetiredMilitary > manage > taxes > isittaxable <—-link

Ron
 
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AL_Shep said:
I'm familiar with DOD-VA pay differences and when to apply one, the other, or both. But I'm coming up short in the search function for my question..

My situation: 100% DOD / 100% VA, PDRL. To make it easy, I'll go with $3500 VA and $5000 DOD. Meaning, $3500 will be tax-free VA pay, and then $1500 will be the remainder of taxed DOD pay. Total of $5000, most of which is VA/tax free. This much I can figure out, I just don't know to ensure I get to that point on the admin side.

My question...how do I ensure I'm getting the right amount prior to separating? M admin section has never discussed High-3 and what the DOD side should amount to (roughly $5000 by my calculations). I'm going in to review my DD-214 next week, should I just expect it to say 100% PDRL and DFAS figures out the rest? Or should there be a dollar # on there. I think I understand the VA side...upload my DD-214 once I separate and the proposed 100% will become official and payments will begin about 45 days after retirement. But who talks to DFAS to say that $3500 of my DOD pay will come from VA as non-taxable, so only pay the SM the remainder $1500 on the DOD side? I never spoke with my DES attorney because I didn't need to up until this point, but now I'm feeling lost. Thanks for anyone that can help.
Click to expand...
So you get max 75% of your high 3 regardless of being 80%, 90%, 100% etc. Are you basing your numbers off of that for your pension before factoring in the VA offset?
 
By federal law, DOD can only pay a max of 75% of base pay, even though you are 100% disabled based on IDES. Just wanted to make sure you were tracking that info…I am not sure if the $5,000 is 100% base pay or at $75%.
 
Max = 75% of average high three base pay.

Ron
 
Maddog123 said:
By federal law, DOD can only pay a max of 75% of base pay, even though you are 100% disabled based on IDES. Just wanted to make sure you were tracking that info…I am not sure if the $5,000 is 100% base pay or at $75%.
Click to expand...
I'm tracking, thanks. And thanks for everyone else's input. Yes, my number of $5000 is 75% base pay high-three (rough estimate).

I think Ron's comments about DFAS and VA communicating electronically about the waiver is my answer. I fully understand (learning through this forum mostly) the difference between DOD and VA pay, and what the end result should be...I just want to make sure my admin section captures it all correctly on the different DD forms to get the right outcome. Thanks again.
 
AL_Shep said:
I'm tracking, thanks. And thanks for everyone else's input. Yes, my number of $5000 is 75% base pay high-three (rough estimate).

I think Ron's comments about DFAS and VA communicating electronically about the waiver is my answer. I fully understand (learning through this forum mostly) the difference between DOD and VA pay, and what the end result should be...I just want to make sure my admin section captures it all correctly on the different DD forms to get the right outcome. Thanks again.
Click to expand...
VA Manual M21-1 discusses the procedures the VA takes in cases where the veteran receives retired pay and has become eligible for VA comp. I have not looked at the specific pages in months... I believe it is in this chapter: LINK <----

M21-1, Part VI, Subpart ii, Chapter 4, Section B - Preparing and Adjusting Awards in Military Retired Pay (MRP) Cases​


Ron
 
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