Is Medical Retirement Considered Gray Area Until 60?

[RangerVic]

I requested that from DFAS yesterday.

As I recall now, this summer they took out the time I was on a green to gold scholarship which was about 22 months.
Base pay: 37 years, 2 months, 12 days
Disability Retirement: 33 years, 1 months, 10 days
Section 1405: 33 years. 11 months, 10 days
I'm not sure why there is a 10 month difference on the bottom two or if it even matters.

 

[RangerVic]

I requested document from DFAS but I will not get it for at least 30 days.
Base pay: 37y, 2m, 12d (they took out about 20 months from my GtoG scholarship time
Disability retirement: 33y, 1m, 10 d
1405: 33 y, 11 m, 10 d

 

[bjenk]

RangerVic:
The 1405 time matters. The 1405 time is your true years of service disability retirement time. It is very important that you compute and verify the 1405 time. This is your real retirement years of service time multiplied by 2.5 percent. The sum of 33 years x 2.5 plus 11/12 x 2.5 equals 84.8 percent. The 10 month difference is your reserve time approved points. Please review IDT, ADT, membership points, and correspondence points. All of the points will not be counted towards retirement due to certain laws, but according to your numbers listed above, you were credited for 10 months.

 

[MSG_Raven2-3]

If you apply for your non regular retirement you no longer get the chapter 61 retirement so in your example it would b $4,100 for VA compensation + $1,700 longevity. So $5,800. If you are a high ranking officer with a high DOD% AND low longevity earned towards a non regular pension it is possible to receive less. So in this example you would not apply for your non regular retirement at age 60 since earned longevity of non regular retirement + VA compensation is less than Chapter 61 pension.

This was a question I had and needed information.

I was Ch 61 and retired at age 47. My High 3 is $5099, VA is $4870, the residual is ~$220, just granted CRSC $1568

Basically in my case, I have already maxed out DOD, maxed VA, and maxed CRSC (for longevity) at my current age 48. Therefore, it makes no sense for me to put in for non-regular reserve retirement at age 60. First of all, I am already getting the longevity pay (CRSC) untaxed, second of all if I put in for non-regular retirement my "retirement amount" is smaller than my CH 61 DOD 75%.

Can anyone verify my logic? This is kind of complicated.

 

[mrrefuge]

First of all Chapter 61 retirement is a medical retirement. The term for a Guard retirement is a non regular retirement. In all circumstances you must agree to offset to a retirement to receive VA compensation and there is no scenario where it makes sense to not accept VA compensation since it is tax free. CRDP is the restoration of that offset by restoring and paying you for the pension that was originally offset by VA compensation.

If you are medically retired you will get the higher between your earned longevity pension from the Guard and your DOD% awarded by the PEB for unfitting conditions. Lets say your pension was $1,000 and your DOD% was 70% with your HIGH 3 base being $4,000. Your retirement rolls will show each computation and pick for you the higher amount. In this case 70% of $4,000 is $2,800. Since $2,800 is higher than $1,000 you get $2,800 for your chapter 61 retirement. Now lets say in either scenario you get $3,800 from VA compensation. When you filled out the application you DID NOT check the box for box 26 because you wanted the compensation and so are agreeing to have it offset any pension you have. See link to application here: https://www.vba.va.gov/pubs/forms/vba-21-526ez-are.pdf So $3,800 VA is higher than $2,800. It's also higher than $1,000 so in either case you will only get $3,800 VA compensation + Tricare. You will not receive any money from your pension.

Now here is where it gets confusing for Soldiers. The most you can get for CRDP or CRSC is the combination of your earned longevity pension and your VA compensation. So if you are getting $3,800 from the VA and then later on qualify for CRSC or CRDP the most you can get is $1,000 earned pension from longevity AND $3,800. So the most the max compensation possible would be $4,800.

In your case since you can't get CRDP until you can apply for for your non regular retirement you should look into applying for CRSC after retiring if medically retired via chapter 61 retirement. There are a lot of presumptive conditions that are combat related if you have deployed to places such as Afghanistan, Kuwait or Iraq etc. My wife qualified for 80% CRSC which allowed her to max out compensation without needing to wait for getting her non regular retirement and all of her conditions were exposure related such as Asthma, Chronic Sinusitis, Tinnitus etc.

To answer your question if you are chapter 61 medically retired you are on PDRL and are retired. At age 60 you would qualify for your Guard retirement and apply for it and it would replace your chapter 61 retirement. Typically the non regular pension amount is less than their chapter 61 amount but when their non regular pension amount is combined with CRDP the total amount is higher than what they are getting with Chapter 61. My wife maxed out compensation with her chapter 61 retirement, + her pension (Her chapter 61 retirement amount was greater than the VA offset so she did get some compensation from her chapter 61 pension too). So she gets 3 seperate checks each month (Chapter 61 pension, VA compensation & CRSC) but when you total it up the amount is the same amount as she would be receiving from her non regular retirement and VA compensation via CRDP. Since CRSC is tax free she nets more compensation compared to CRDP since CRDP is the restoration of the pension offset by VA compensation. So if your pension is taxed then that CRDP restoration will be taxed.

So for My example. I am confused. I am 100% DOD/VA. Had over 20 years combined active / drilling reserves, was Ch-61. Now I get my LESS which shows $4766 DOD less VA and LESS SBP. I get the residual. What happens with I turn 60? Do I get the Full $4766? Will my SBP premium drop? How can I be sure? DFAS will not give an answer. I am trying to plan my full retirement and need reasonable numbers to use.

 

[Provis]

So for My example. I am confused. I am 100% DOD/VA. Had over 20 years combined active / drilling reserves, was Ch-61. Now I get my LESS which shows $4766 DOD less VA and LESS SBP. I get the residual. What happens with I turn 60? Do I get the Full $4766? Will my SBP premium drop? How can I be sure? DFAS will not give an answer. I am trying to plan my full retirement and need reasonable numbers to use.

When you reach age for full retirement at age 60 you apply for guard/reserve pension. The most you can get is the full value of your guard/reserve pension + VA disability compensation. SBP will not drop as you are insuring income for chapter 61 pension. Did you apply for CRSC? If you get CRSC and that makes you whole there is no point in applying for your Guard/Reserve pension. That is where my wife is at. Between everything she already maxes out her income so she will not be applying for her Reserve pension. She had 17AFS as AGR but also did have a 20 year letter. That 20 year letter is basically insurance that if she didn't max out compensation via CRSC then she could max out at age 60 with her Reserve 20 year letter. Glad she applied for CRSC and clawed back the $1,500 she was losing out on because if it wasn't for that she would have to wait 20+ years to get full pay since she medically retired at age 37. She joined at age 17 so she was very young compared to her time in to get a 20 year letter.

 

[Provis]

So for My example. I am confused. I am 100% DOD/VA. Had over 20 years combined active / drilling reserves, was Ch-61. Now I get my LESS which shows $4766 DOD less VA and LESS SBP. I get the residual. What happens with I turn 60? Do I get the Full $4766? Will my SBP premium drop? How can I be sure? DFAS will not give an answer. I am trying to plan my full retirement and need reasonable numbers to use.

All you need to do is run the numbers. How much is your guard/reserve pension worth? How much is your VA disablity? Combine those 2 numbers. That's the most you can get in almost all cases. Now take your pay and subtract it from those numbers. If all of your pay subtracted leaves an amount leftover that's the amount you are losing due to VA offset. Also, if you apply for guard/reserve pension I think you can change SBP but not sure on that one. My wife chose the low cost option and so its only $25 a month for SBP. SBP cost way too much compared to just paying life insurance. Also, like i just said in earlier post. CRSC can claw back any money lost out from VA offset so if your combined total between VA pay and longevity earned pension is greater than your current pay you can apply for CRSC and try to max out compensation. If that happens, then there is no need to worry about an earned retirement for guard or reserves. Also if your are reserves if your points are low its possible for Soldier with high DOD% to max out compensation that way especially for those with low points who are Officers or Warrant Officers.

You just have to run the numbers. Also, if chapter 61 retired I am sorry to say they do something sneaky. They use your HIGH 3 tables when you are medically retired at chapter 61 timeframe. You do not get to use future pay tables for a guard, or reserve retirement since you medically retired and were not moved over the gray area retired which is in the Retired Reserves. So if your young then you could lose out a lot due to possible inflation of military pay charts which can exceed your COLA increases for a chapter 61 current retirement.

 

[mrrefuge]

When you reach age for full retirement at age 60 you apply for guard/reserve pension. The most you can get is the full value of your guard/reserve pension + VA disability compensation. SBP will not drop as you are insuring income for chapter 61 pension. Did you apply for CRSC? If you get CRSC and that makes you whole there is no point in applying for your Guard/Reserve pension. That is where my wife is at. Between everything she already maxes out her income so she will not be applying for her Reserve pension. She had 17AFS as AGR but also did have a 20 year letter. That 20 year letter is basically insurance that if she didn't max out compensation via CRSC then she could max out at age 60 with her Reserve 20 year letter. Glad she applied for CRSC and clawed back the $1,500 she was losing out on because if it wasn't for that she would have to wait 20+ years to get full pay since she medically retired at age 37. She joined at age 17 so she was very young compared to her time in to get a 20 year letter.

My Current LES shows $4766 a month before any offsets. However, my longevity retirement under normal circumstances would only be $1152. From my understanding DFAS gives the higher of the two. I do not qualify for CRSC.
Why am I being offset now? Would the offset go away at 60?

 

[Provis]

My Current LES shows $4766 a month before any offsets. However, my longevity retirement under normal circumstances would only be $1152. From my understanding DFAS gives the higher of the two. I do not qualify for CRSC.
Why am I being offset now? Would the offset go away at 60?

By law any money received via chapter 61 pension must be offset by any VA disability received. If you don't qualify for CRSC then you lose out on $1,152 a month then. Once you reach age 60 AND you need to apply for your guard/reserve retirement then you will get that amount at that time due to qualifying for CRDP. The offset will no longer happen as long as you have a total VA disability rating of 50% or higher.