Today I received my 199 and DoD gave me 20% and VA gave me 90%. Now I have to decide if I want to fight this DoD rating or accept the almost $100k severance pay and $1930/month from VA. My PEBLO is fighting hard for me to appeal this because they made a huge error on my depression diagnosis. I am married to another service member and will receive free VA care anyway so I am leaning towards taking the severance pay? Any suggestions?
Help with Decision
- Thread starter Soldiergurl
- Start date
My thoughts, first and foremost have you reached out to the Soldier's Counsel on this. I would appeal and request the Formal PEB. You have nothing to lose by requesting this. It is much more important to get to 30% for your DOD rating and be entitled to those benefits for life. I realize that 100,000 severance sounds like a lot but the lifetime of benefits in my opinion far outweigh the short-term benefits of the severance.
Just my opinion on this. Take care and good luck.
Just my opinion on this. Take care and good luck.
Welcome to the PEB Forum!
Wow! You are in a very interesting situation; a positive result from either option.
First, I would suggest that you immediately contact the SMEBC who is a very important advocate throughout the IDES, and they are specially trained in the IDES process. The SMEBC's mission is to maximize your chances of attaining your goals while managing your expectations. Therefore, you should consult with your SMEBC upon:
·Referral into the IDES
·Receipt of your Medical Evaluation Board (MEB) findings
·Receipt of your Informal Physical Evaluation Board (IPEB) findings
Second, I would suggest that ultimately the decision should be based upon securing the best solution for yourself and your husband. In my opinion, it's a win-win situation but you should consider all the factors of a military disability retirement versus severance pay.
For example, is the DoD rating combat-related which would affect the tax status of your severance pay? Is your husband currently eligible for a LOS military retirement? If not, how many more Active Duty years are required for military retirement eligibility? If your husband is not capable to obtain a 20+ year LOS military retirement, what type of medical benefits will you have as his spouse? And so on.
Thus, I quite often comment that "possessing well-informed knowledge is truly a powerful equalizer."
Best Wishes
Another thing to consider is that if you take the severance, you will not collect the monthly VA check until you have paid that amount back through offset from what I understand. So, you would be looking at seeing a VA check in about 4 years based on the numbers you gave.
Warrior posed some great questions for you and hope you consider them very carefully.
From my IDES experience, and in my case, I fought for the correct rating percentage - especially when I did the calculations between severance and disability retirement.
When I calculated my severance pay and then looked at what my monthly retirement would be at the lowest possible rating (30%) - I discovered that even with the LOWEST rating of 30%, it would only take 4 years of receiving that low monthly retirement pay to equal that big severance check that they were more than happy to write me.
Any monthly retirement pay in excess of 4 years and I was WAY money ahead over the long run.
Since I didn't think I was going to die inside the first four years, and, considering all the perks you get with retirement that you don't get with severance, and considering that I could live another 20 years, my calculations told me to go for the correct rating and get my retirement.
As it finally worked out for me, the Army retired me with 70% PDRL & I also received 100% VA. WAY higher rating than what I had initially calculated because I DID fight to get the Army to get their numbers correct! (GREAT LAWYER, too!)
So for me, with the 70% PDRL, I only need to live long enough to receive 36 monthly retirement checks. Anything after that first 36 months - and for the rest of my life thereafter - is more than I would have ever received in gross severance pay.
I was just like you - well over 100 Grand for severance. And while it might look like a nice piece of change, over the long haul, it's nothing more than Army "chump" change.
Even if you didn't spend a single nickle of your severance, and it never got taxed, you still could not invest it safely to gain enough interest on it to give you a monthly return equivilant to your monthly PDRL pay.
Let us know what works for you!
V/r,
nwlivewire
Idk man, it's hard to turn down 100k. I wish I would have gotten severance. Only thing is medical for my family. By almost any job offers it and you still have to pay for tricare anyways. Me personally would take the severance and pay off debt and be clear for a few years. It cost so much here in Alaska it's hard for me to save money for me and my family. That's why I would take it, because I don't have anything saved up. Well not much anyways.
Also......
Your DoD disability retirement rating cannot go down over the years, but your VA rating CAN go up OR down over the years.
Unless our government goes broke and stops paying us, your military retirement rating percentage is set in stone and cannot go down like the VA can do to you. Plus, you get COLA's, medical benefits, etc.
I am a widow, so I don't know if you have a survivor benefit clause with the military disability retirement pay or how that works. But that might be another thing to consider if you have a surviving spouse and/or kids at home who are not past college age or 23/26 years old IF you should pass away.
PDRL income is constant and for your entire lifetime - something you can count on in the good times and when the hard times come.
I don't know your age, but as an example for your thoughts is this:
A FEMALE, born in the USA in the year 1980, has an AVERAGE life expectancy of 77.6 years.
For this female, assuming your same situation of severance Vs. retirement, it would make more financial sense for her to go for the retirement as she would stand to gain an additional FOURTY YEARS (480 monthly payments) of retirement income Vs. the one shot severance pay-off.
(Plus the COLA and all the perks, too).
Let us know what works best for you!
V/r,
nwlivewire
Couple thoughts, I will throw out there. bewing the bad guy I guess
How long have you been married? honest thoughtful question you can answer for yourself we do not need to know. Second, the VA will only recoup severance at the rate you were paid severance at (if your disability they found you unfit for at the 20% the va will collect to the 100K amount at 20% of your VA pay)
IF your marriage in your mind is 100% stable I say take the severance and your 1500 a month and press on. There is something to be said about the DoD rating never going down and your VA may drop etc. and this is a fair concern to have-if your depression improves alone that could cost you 40-50% rating a month. so weigh your options and decide whats best for YOU, YOUR FAMILY and both of YOUR futures.
How long have you been married? honest thoughtful question you can answer for yourself we do not need to know. Second, the VA will only recoup severance at the rate you were paid severance at (if your disability they found you unfit for at the 20% the va will collect to the 100K amount at 20% of your VA pay)
IF your marriage in your mind is 100% stable I say take the severance and your 1500 a month and press on. There is something to be said about the DoD rating never going down and your VA may drop etc. and this is a fair concern to have-if your depression improves alone that could cost you 40-50% rating a month. so weigh your options and decide whats best for YOU, YOUR FAMILY and both of YOUR futures.
This!
Thanks everyone...we have been married 12 years. i'd say its stable. From what I understand I will get the $1930/month from VA minus $255/month for VA recoup and $148000 severance pay if I don't appeal. If I do appeal and win the monthly pay will be the same but i lose the severence pay. What confuses me is exactly what "retirement" benefits am i losing if I'm dual military and VA healthcare is free anyway just in case he kicks me to the curb. This crap is way too confusing!!!
No, not combat related
***I'll start this with mentioning that I'm a fighter***
Remember that severance is taxed...your net won't be $148k...also consider that this (combined with any other income you have for 2013, assuming you get the severance this year) will surely bump you into one of the highest tax brackets for the year. Also, as stated, you will have to pay back the severance (so, also as stated, it is a "loan" of sorts).
Depending upon your conditions, just ONE hospitalization can exceed $50k (if you get an emergency surgery- double that figure). I know, we're young and feel bulletproof at times, but being MEB'd should be an eye opener- s*** happens, and usually when you least expect it. Having Tricare can be a life saver. You do not have Tricare is you accept severance. With the way healthcare reform is going, Tricare might be your best or only option to take care of your family and yourself.
If you fight and get bumped up to 30%, you will have:
- a pension that will be there for you every month of your life
- Tricare and prescriptions
- base privies that may not seem like much, but consider: BX/PX/NEX/Commissary savings, MWR savings, library, auto skills and hobby shops, Tickets and Tours (the last free tickets we received were to the KC/Denver game at KC- $75 per ticket x 4), scholarship opportunities only for active duty and retired members, space available lodging and more.
I know, $148k is a large number and has strong appeal, but be careful not to be distracted by one gold nugget in your hand while many more are tumbling down the riverbed (one of my favorite hobbies is prospecting and panning in Colorado and Montana, sorry for the cheesy example).
Ultimately, as stated by others here, you have to do what is best for your family and yourself- you have to plan short term (severance), but it is also wise to prepare for the long haul (retirement). Just my opinion- and you know what they say about opinions....
Remember that severance is taxed...your net won't be $148k...also consider that this (combined with any other income you have for 2013, assuming you get the severance this year) will surely bump you into one of the highest tax brackets for the year. Also, as stated, you will have to pay back the severance (so, also as stated, it is a "loan" of sorts).
Depending upon your conditions, just ONE hospitalization can exceed $50k (if you get an emergency surgery- double that figure). I know, we're young and feel bulletproof at times, but being MEB'd should be an eye opener- s*** happens, and usually when you least expect it. Having Tricare can be a life saver. You do not have Tricare is you accept severance. With the way healthcare reform is going, Tricare might be your best or only option to take care of your family and yourself.
If you fight and get bumped up to 30%, you will have:
- a pension that will be there for you every month of your life
- Tricare and prescriptions
- base privies that may not seem like much, but consider: BX/PX/NEX/Commissary savings, MWR savings, library, auto skills and hobby shops, Tickets and Tours (the last free tickets we received were to the KC/Denver game at KC- $75 per ticket x 4), scholarship opportunities only for active duty and retired members, space available lodging and more.
I know, $148k is a large number and has strong appeal, but be careful not to be distracted by one gold nugget in your hand while many more are tumbling down the riverbed (one of my favorite hobbies is prospecting and panning in Colorado and Montana, sorry for the cheesy example).
Ultimately, as stated by others here, you have to do what is best for your family and yourself- you have to plan short term (severance), but it is also wise to prepare for the long haul (retirement). Just my opinion- and you know what they say about opinions....
My question is not if it is combat related. My question is was the unfitting condition incurred or aggravated in a combat zone. These are two separate issues.
Mike
Another thought:
VA can be free or low cost, but TriCare is a great thing to have as it gives more options for medical services and Doctors/specialists. Also, TriCare can be used almost anywhere in the world - VA is limited and of course, MediCare is only good in the USA. So international portability and use of health care is a bigger advantage with TriCARE than VA care.
I read you have a military spouse. Someday he may get his 20 and retire. So, as long as you're still a married couple, you're good to go with most of the bennies as you will "piggy-back" on his retirement from military service and receive some bennies.
OK. If I understand your situation, you are projected to get a gross, lump sum of 148,000.
Assuming 28% tax from the Feds, and no state tax, your Fed tax withholding would be about 41,440.
You would net 106,560.
VA is projected to be 1,930 per month. If you get 20% severance, then you pay back 20% of your VA monthly (386 per month).
Your monthly net from the VA would be 1,544.
If your recoupment is 386 p/month, and your gross severance is 148,000, then it will take the government almost 32 years to recoup the severance back before your VA is fully re-instated back to you.
This is assuming there is no change to your VA disability rating - either up or down.
Have you talked with a tax/CPA about how this severance will fold into your total income for 2013? It will put your family into a higher taxation bracket than what you are used to paying.
Another thing to think about is if and when Congress changes the law that allows Chapter 61 disability retirees to receive their full VA and DoD retirement. If you take severance now, you would not be able to benefit from any future changes that could come to those who are military disabiled and retired out. You would not be a Chapter 61 retiree as you will have chosen severance instead. This is a possible card you could possibly be tossing out of your hand now and not have it to play should the rules change in the future. And this would be costly for you - if and when Congress changes or even opens this up just a little bit.
Oh. The VA DOES factor in BOTH military pension (regular or disability) and VA compensation when determining gross income for qualifying for a VA Home Loan. If you take severance, you won't have a "pension" that could count towards this qualifying income thing for a VA Home Loan. You would have only your monthly VA "net" after recoupment though. You never know, but that paper disability from the DoD could make a difference to you someday on paper anyway. It's just another little "ace in the hole" should you ever need it.
Let us know what works best for you!
V/r,
nwlivewire
If your married to a soldier, if it was me id take the severence (I got 100k from tsgli so id be greedy if it was me lol)
But as far as tri-care yes it's good but they starting to make tricare to where its only at its best when you live within 50 miles within a MTF, which you will since your spouse is military but you will have tricare anyway because of your spouse retired or not
Also think about if you used onbase facilities while you we're in, if you didn't while your in I doubt you will when your out
If you plan on getting a job when you get out once you add your own steady income plus the income of your spouse that 300$ or whatever the number is that's being recouped wont even effect you budget
At the end of the day you and your spouse just have to do the math and choose what's BEST FOR Y'ALL AND Y'ALL FUTURE!!!
But as far as tri-care yes it's good but they starting to make tricare to where its only at its best when you live within 50 miles within a MTF, which you will since your spouse is military but you will have tricare anyway because of your spouse retired or not
Also think about if you used onbase facilities while you we're in, if you didn't while your in I doubt you will when your out
If you plan on getting a job when you get out once you add your own steady income plus the income of your spouse that 300$ or whatever the number is that's being recouped wont even effect you budget
At the end of the day you and your spouse just have to do the math and choose what's BEST FOR Y'ALL AND Y'ALL FUTURE!!!
As far as what Livewire said about the VA home Loan, depending on your spouse rank, his income alone including BAH and BAS is enough to get approved for a Va Home Loan with approved credit
I just purchased a 200,000$ home based on my e-4 pay and my net worth(assets, savings etc
So if you purchase a house and they use you VA pay after recoupment and you spouse pay and plus they see that you got that big Severence you'll more than likely get approved
And rates are as low as it ever been, when my house was built me and a couple houses were the only ones on my street, now the street is full
I just purchased a 200,000$ home based on my e-4 pay and my net worth(assets, savings etc
So if you purchase a house and they use you VA pay after recoupment and you spouse pay and plus they see that you got that big Severence you'll more than likely get approved
And rates are as low as it ever been, when my house was built me and a couple houses were the only ones on my street, now the street is full
I'm leaning more and more towards the severance pay. I haven't been in a PX or commissary in at least ten years. The only thing I will be losing is the free medical, but I will be working so I will have coverage there and the VA and my husband's tricare. I think I'm covered in that area. We don't have kids to worry about so whew, that's good. I may just take the $100,000 (after taxes), and the $1930/month (less $255 VA recoupment) and run...ok, well limp away.