I was speaking with a work colleague who was medically retired in 2011 and went through our current process. He told me at the end the board looked at whether to retire him with Method A medical retirement or Method B VA Retirement (retiring with High 3s). The VA in my eyes makes more sense since it’s tax free but I don’t understand how that was decided and if that’s still true these days. Does anyone know if this is a method used for medical retirement compensation?
Medical vs VA decision query
- Thread starter Phoenix81
- Start date
Method A: High-3 (highest 36 months of pay) x DoD % (up to a max of 75%)
Method B: High-3 (highest 36 months of pay) x retirement multiplier (2.5% or 2% if BRS) x years of service.
VA amount is the current compensation amount for your total VA disability percentage based on VA pay table.
Unless you are an Officer with multiple years in service, the VA amount is usually the larger payment. It is also tax free.
If you end up going through the full MEB/PEB process and are eligible for medical retirement (30% or more DOD rating), you are eligible to receive your VA amount or DOD amount. If you served less than 20 years, you have to choose one or the other.
Ok. If you’ve served over 20 then it’s at the descretion of the DoD then? The VA seems the best avenue based off the tax free benefit to the Servicemember due to their affliction. Just trying to understand how that works for someone over 20 yrs at this point. Appreciate the feedback.
If you served 20+ years, you'll get a regular longevity retirement like a standard retirement would receive. If you are rated 50% or more through the VA, you will receive both your DOD retirement and your VA retirement.
Those with less than 20 years only receive one of the two. 20+ years receive both VA and DOD.
Those with less than 20 years only receive one of the two. 20+ years receive both VA and DOD.
Ok. As I’m reading the regulation on medical retirement vs going through regular retirement and applying for VA disability only that medical retirement is taxed in the methods described and VA disability is not. I was trying to understand how the medical board decides if someone with 20+ years that goes through a medical retirement is either identified to receive medical disability or VA disability if that makes sense? I could also be confused as I’m reading through the regulation and various forums as well
If you have 20 years regular retirement earned there is very little to no benefit of a medical retirement. You really have nothing to worry about. You will get your VA tax free and your taxable pension. If your chapter 61 pension is tax exempt you might be able to net a little more money. CRSC after you get out might be able to help you out on taxes but the basic formula and cap remains. That is that you will get all of your earned regular longevity retirement and all of your VA compensation tax free as long at total VA% is 50% or higher.
It sounds like you are thinking the PEB decides what you will receive upon retirement. This is not true. If you are less than 20 years… YOU decide which you want to receive, VA comp or retirement pay. You would obviously choose the higher pay option. If you choose retirement pay the PEB does not decide the method in which your retirement pay is calculated. DFAS will do that math and pay you accordingly.