VA waiver issue

amac12378

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Registered Member
Hello, long time stalker first time posting. I was medically retired 29 July 18. I received my retirement pay break down letter from DFAS in August. It stated what I had expected- My years of service (21 years, 9 mo, 20 days = $2,455) is greater than my disability pay (50%=$2257). I thought wooohooo I am going to be one of the lucky ones who have no pay issues!
Fast forward to Oct where my RAS shows a VA waiver of $372. I am 100% disabled so I did not expected a deduction of my retirement pay. After multiple phone calls, the VA requesting an audit, and 3 months later DFAS is sticking to their guns. Yes they know I am 100% from the VA, yes my CRDP restoration of $2,083 is correct and yes the VA waiver of $372 is correct.
Today after a 3 hour wait I got to a tier 2 representative on the phone who told me that my retirement pay (method B-years of service) is more than normal so the waiver deducts the difference because legally I cannot get more than my years of service pay. Now I am sure you are scratching your head just like me. HOW is my years of service pay more than what it should be? She said that my method B factored in my disability, therefore it is more than a normal years of service pay? No where on any paperwork I received states this, nor can I find any info on Method B (years of service) factoring in disability pay in the calculation?
Does anyone know anything about this as I am at my wits end dealing with DFAS. Any help is greatly appreciated!
 
If I understand your situation correctly, you have 21 years and nine months active duty and you qualify for a regular retirement, but you received a CH 61 retirement. Your VA comp rate is 100% ($3000 +) and your longevity portion of your retired pay is 2455 (which is greater than the DOD rate of 50% x high three). The amount paid by DFAS 2083 + 372 waver = 2455.

Offhand I know that for CH 61 retirees, the CRDP plus residual retired pay (if any) cannot exceed the longevity portion of the retired pay, but that is not the problem here. It is their application of the CRDP law and my initial reaction is that they are wrong.

I need to review the CRDP law again and will return. I agree with you.

Ron
 
Yes that is correct, I was medically retired, but my longevity pay was the greater of the two retirement options. I am receiving 100% VA (approximately 3000) which is correct.
Just to clarify, the amount paid by DFAS is 2083. I assumed that was 2455 minus the va waiver of 372?
Thanks!
 
1. DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 1
* March 2018

*010204. Retired Pay Formulae

If a member entitled to retired or retainer pay would otherwise be entitled to retired pay computed under more than one formula, then the member is entitled to be paid under the applicable formula that is most favorable to the member. The retired pay formulae are more fully covered in Chapter 3. The formulae are as follows:

* A. For Regular and non-Regular (Reserve/Guard) members covered by the legacy retirement pay plan, monthly retired pay is equal to retired pay base times 2.5 percent times years of service. For Regular and non-Regular (Reserve/Guard) members covered by the BRS, monthly retired pay is equal to the retired pay base times 2.0 percent times years of service.

B. For disability retirement, the member may elect retired pay computed under subparagraph 010204.A, or monthly pay equal to retired pay base times military disability percentage.

2. DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 64 * October 2018
https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_64.pdf

6404 MONTHLY PAYMENT AMOUNT (CRDP)

Subject to the provisions of paragraphs 640401 and 640402, the monthly amount of retired pay restored under CRDP will be the amount of the offset imposed by receipt of VA disability compensation.

640401. Special Rule for Disability Retirement

Members retired for disability under 10 U.S.C., Chapter 61, §§ 1201 through 1222 remain subject to the offset required under 38 U.S.C. §§ 5304 and 5305 for any retired pay they receive that is in excess of the amount of retired pay to which they would be entitled under any other provision of law based on service in the Uniformed Services, had they not retired for disability. Since retired pay in excess of the amount calculated for years in service is still subject to offset under the CRDP program, a member with an amount of retired pay remaining after offset of VA disability compensation, that is greater than the amount calculated for years of service, is not eligible for any increase in payment of retired pay under the CRDP program.

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In my opinion, items 1-2 should be your proof that DFAS' computation is in error.

I would be happy to assist you in creating the letter of rebuttal to the Director of Retired Pay, DFAS. I have written several...

Ron
 
Yes that is correct, I was medically retired, but my longevity pay was the greater of the two retirement options. I am receiving 100% VA (approximately 3000) which is correct.
Just to clarify, the amount paid by DFAS is 2083. I assumed that was 2455 minus the va waiver of 372?
Thanks!
Please provide the following:
  1. High three average base pay
  2. Confirm 50% DoD percentage and 21 years and nine months active duty

Ron
 
1.High 3 average is $4515.72, per my Summary of Retired Pay Account paperwork.

2. Percentage of DoD disability is 50%; Years of service 21 years and 9 months.
 
1.High 3 average is $4515.72, per my Summary of Retired Pay Account paperwork.

2. Percentage of DoD disability is 50%; Years of service 21 years and 9 months.

Computation:
a. 21.75 yrs x 2.5% = 54.38 % multiplier
b. 4515.72 x 0.5438 = 2455.65 longevity portion of retired pay
c. You said, "...the amount paid by DFAS is 2083. I assumed that was 2455 minus the va waiver of 372"
d. My comment: You are correct (a rounding difference which is insignificant).

Ron
 
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Your case and references are 90% completed in this thread. Recommend you write a letter to the Director, Retired Pay, DFAS with supporting documents attached. I posted his name on this site a month or so ago and will locate it. If you prefer, I can help you with your rebuttal letter.

Ron

Added: Director, Military Retired Pay, is: Roland Wadge
 
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amac12378,

This is regarding your recent message that showed you chose the CBS/REDUX (Career Status Bonus with Reduced Retirement) at year 15.

Most of this (maybe all) will not be new to you.
Amount of CRDP Payable LINK 6404 MONTHLY PAYMENT AMOUNT

"Subject to the provisions of paragraphs 640401 and 640402, the monthly amount of retired pay restored under CRDP will be the amount of the offset imposed by receipt of VA disability compensation." Note: The amount of offset is determined by the VA compensation amount and the amount computed under REDUX for those who chose that program.


Reference: DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 3, * July 2018
and REDUX and CRDP Discussion LINK

Example of REDUX CRDP Computation, January 2017 LINK post 13

030210. Special Computations for Career Status Bonus with Reduced Retirement (CSB/REDUX)

A. The retired pay or retainer pay multiplier of members who elected the CSB with REDUX retirement will be reduced 1 percentage point for each full year of creditable service less than 30 and 1/12th of 1 percent for each full month of creditable service less than a full year.
B. Effective on the first day of the month following the member’s 62nd birthday, DFAS will recompute the retired pay of members who elected the CSB with REDUX to equal the amount of retired pay to which the member would have been entitled on that date if the member had not taken the CSB with REDUX retirement and had no reduction in their multiplier or COLA. Following the restoration discussed in the preceding sentence, DFAS will continue to apply the annual COLA reduction to the member’s retired pay each year throughout the member’s retirement.

C. Members who elected the CSB/REDUX retirement and accepted early retirement under the TERA program will have their retired pay recomputed as discussed in subparagraph 030210.A; however, they will be subject to the TERA reduction factor from Table 3-6 for the entirety of their retirement with no restoration of that reduction at age 62 or at any other time.
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10 U.S. Code § 1414
LINK
Re: CRDP "(11)General limitation.—
Retired pay determined under this subsection for a qualified retiree, if greater than the amount of retired pay otherwise applicable to that qualified retiree, shall be reduced to the amount of retired pay otherwise applicable to that qualified retiree."
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A fellow veteran presented a written request to DFAS three years ago inquiring about the computation of CRDP for CRB/REDUX retirees. The reply from DFAS: "The CRDP dollar amount is based on the 40% REDUX retirement."

You can request an audit of your pay by writing:

Defense Finance and Accounting Service
U.S. Military Retired Pay
8899 E 56th Street
Indianapolis IN 46249-1200

-------

Ron
 
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I was able to determine (within a couple of dollars due to rounding) how DFAS computed the amount payable under REDUX.

Factors:
--High three 4515.72
--active duty 21.75 yrs
--21.75 yrs x 0.025 = 54.38%
--30 years minus 21.75 = 8.25 yrs
--8.25 years x 1% = 8.25%

Computation of longevity pay:
  1. 4515.72 x 0.5438 = 2456
  2. 54.38 minus 8.25 = 46.13 REDUX multiplier
  3. 4515.72 x 0.46.13 = 2083 REDUX CRDP
  4. 2456 (if not for REDUX) minus 2083 = 373 difference
As noted earlier, there are a couple of insignificant rounding differences.

The term "VA waiver" is somewhat misleading. It is actually the difference between with and without REDUX On the other hand, it is the waiver of retired pay due to receipt of VA compensation NOT restored by CRDP, so in that sense it is understandable.

Ron
 
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