Unpacking CRSC and CRDP with over 20 years

C

Corvette1140

PEB Forum Regular Member
Registered Member
My DOD is 70% and 100% VA proposed. I will have 20 years 10 months continuous Active Duty when I retire Sep 15th 2022, after I fly out of Germany on the 20th for terminal leave.

I have asked some people that “should” know what things would look like financially if I take Combat Related Special Compensation being I am at 70% DOD.

These are bright people, but no one can really give me a clear answer, or explain it in any tangible way what financially that looks like. What formula should I be using?

Thank you in advance as I understand its either CRDP or CRSC, unless I am mistaken.
 
First of all you will initially qualify for CRDP. CRSC is applied for after you get out and since you qualify for CRDP you may already be maxed out on compensation. The 70% DOD only relates to your chapter 61 retirement. CRDP is the combination of your longevity + VA which will be more than just getting your Chapter 61 retirement at 70%. CRDP is automatic and you don't have to do anything:)

Another factor is to know if your chapter 61 pension is exempt from Federal Income Taxes. Was any of your conditions for your medical retirement combat related? If so then all of your pension and VA money will be tax free for federal income tax purposes. If that's the case CRSC in any circumstance would not help you financially.

In other words, in your situation there are very few circumstances where CRSC is going to net you more income or pay less taxes than CRDP.

@RonG Your input would be appreciated.
 
Some factors in this case.

1. The longevity portion of retired pay is the result of
active duty or active duty equivalent years and months x 2.5% = longevity multiplier
Example: 20 yrs 10 mo (20.83) x 2.5% = 52.08% (2% is used for those under blended retirement program)
average high three base pay x longevity multiplier (52.08%) = longevity portion of retired pay

2. Your 70% Dod retirement percentage x average high three = DoD retirement
The DoD retirement @ 70% is reduced by the amount of your VA compensation. You keep any left over/residual retired pay.

3. The combination of CRDP and residual retired pay cannot exceed the longevity portion of retired pay’
The amounts discussed in this section (item 3) are what you receive with CRDP.

4. With CRSC, the same reduction discussed at item 2 occurs. CRSC will be the lesser of
The amount and percentage found in the VA compensation tables that mirrors the approved CRSC percentage
OR
the longevity portion of retired pay.
Note: The combination of CRSC and residual retired pay cannot exceed the longevity portion of retired pay.

5. CRSC is non-taxable. Recommendation: If the Approved CRSC percentage is the same as the VA compensation percentage, take CRSC. Otherwise, take CRDP.

Ron
 
Provis said:
First of all you will initially qualify for CRDP. CRSC is applied for after you get out and since you qualify for CRDP you may already be maxed out on compensation. The 70% DOD only relates to your chapter 61 retirement. CRDP is the combination of your longevity + VA which will be more than just getting your Chapter 61 retirement at 70%. CRDP is automatic and you don't have to do anything:)

Another factor is to know if your chapter 61 pension is exempt from Federal Income Taxes. Was any of your conditions for your medical retirement combat related? If so then all of your pension and VA money will be tax free for federal income tax purposes. If that's the case CRSC in any circumstance would not help you financially.

In other words, in your situation there are very few circumstances where CRSC is going to net you more income or pay less taxes than CRDP.

@RonG Your input would be appreciated.
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Thanks Ron, and Provis,

My conditions were combat connected, and that clears up a lot.
 
Corvette1140 said:
Thanks Ron, and Provis,

My conditions were combat connected, and that clears up a lot.
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Something to keep in mind: even if the PEB and VA states V1/V3 "Yes" or "combat incurred" CRSC uses a slightly different rule set in making their "combat-related" determination. Things that help with the latter: combat-related awards, such as PH/BS/SS/CAB/CIB/CMB or any award with the "V" device, medical documentation as close to the point of injury as possible, documented in NCOERs/OERs, etc. Buddy statements will not work as they are not considered "official". CRSC looks at any and all VA rated conditions 10% or more, not just what the PEB found.
 
This is an excellent point made by @RetiredColonel-MikeT :

”CRSC looks at any and all VA rated conditions 10% or more, not just what the PEB found.”

Many who receive CRSC are not disability retirees, so they did not have a PEB.
I had a regular retirement in 1991 and presently have a 100% CRSC approval.

Ron
 
RonG said:
This is an excellent point made by @RetiredColonel-MikeT :

”CRSC looks at any and all VA rated conditions 10% or more, not just what the PEB found.”

Many who receive CRSC are not disability retirees, so they did not have a PEB.
I had a regular retirement in 1991 and presently have a 100% CRSC approval.

Ron
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Is there a 45 day timeline after conclusion of PEB
RetiredColonel-MikeT said:
Something to keep in mind: even if the PEB and VA states V1/V3 "Yes" or "combat incurred" CRSC uses a slightly different rule set in making their "combat-related" determination. Things that help with the latter: combat-related awards, such as PH/BS/SS/CAB/CIB/CMB or any award with the "V" device, medical documentation as close to the point of injury as possible, documented in NCOERs/OERs, etc. Buddy statements will not work as they are not considered "official". CRSC looks at any and all VA rated conditions 10% or more, not just what the PEB found.
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Mike, is it possible to apply for CRSC to find out if approved, and if it is a lower monetary amount…then decline CRSC and go with CRDP?
 
Corvette1140 said:
Is there a 45 day timeline after conclusion of PEB

Mike, is it possible to apply for CRSC to find out if approved, and if it is a lower monetary amount…then decline CRSC and go with CRDP?
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By default, you do NOT end up with the least amount between the two. DFAS will always go with the higher, they won't shortchange you - there, I said it, never thought I would ;) lol
 
Re: “Default”

Happens frequently, but you can decline the DFAS selection if you want..

I have received either CRSC or CRDP since around 2008. My ratings changed multiple times, some of them temporary.

I once chose the lesser of the two because as the result of my own computations, I determined that I would receive more overall net by choosing the lower CRSC due to my income from Oklahoma State U.

In other words, my non-military income and associated taxes influenced my decision.

Ron
 
RonG said:
Re: “Default”

Happens frequently, but you can decline the DFAS selection if you want..

I have received either CRSC or CRDP since around 2008. My ratings changed multiple times, some of them temporary.

I once chose the lesser of the two because as the result of my own computations, I determined that I would receive more overall net by choosing the lower CRSC due to my income from Oklahoma State U.

In other words, my non-military income and associated taxes influenced my decision.

Ron
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Thanks, Ron - very valid point about one's own tax necessities when it comes to sticking with CRSC or CRDP and sometimes when looking at it from the outside it might not make sense, but to the individual, it makes a ton a sense. Moral of the story? Don't judge someone else's CRSC/CRDP election until you know the full story, and a lot of times it's the civ side that sways the choice.

- Mike
 
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