Very Confused VA and CRSC Information - Please advise

D

Dreham

PEB Forum Regular Member
Registered Member
Sir,

Thank you for your continued help. I am being told from care coalition members on base that even though I am medically retiring and do not have 20 years of service I will not be receiving any offset compensation from the DoD WHATSOEVER and that CRSC is the only possible way I could be made whole. The JAG on base said I will receive ~$4300 from the VA PLUS the different between that and (70% x $7490) 5,243. That difference will be taxed and in order to make it not tax I must get 100% CRSC.

Is their any compensation I will automatically get from the DoD in my scenario?
Do I automatically only receive VA pay and must apply for CRSC
Do I receive VA pay and the difference up to $937 and apply for remaining $419 via CRSC?

Stats:
Ratings have come in.

1. High 3 $7490? I was promoted to O-3 in feb of 2021
2. DOD: 70%
3. VA percentage: 100% DEPENDENT - 1x Spouse 3x Child under 18 yrs old
4. Approved CRSC percentage: 50%
5. Time: 9 years 3 month
6. Blended retirement: yes
7. Titles of any SMC approvals from VA? Examples = N/A
Thank you for your time.
 
So you get all of your VA. You get what ever is leftover after VA offset of your chapter 61 pension. In your case it looks like total compensation is $5,243. The most you can get by law is the total between your earned longevity pension + VA compensation. Its possible you aren't even losing any money. If your earned pension is worth over $937 then that is the money you are losing out on.

Run the numbers to see. 9 years at 2% equals about 18% time high 3 which you state is $7,490 and so that's about $1,350. Since $937 is less that's the money you are losing out on.

So the good news is that you are only short about $400. Look up CRSC. If you qualify then apply. If not then there is no more compensation that you can get. Its pretty simple. Can't do anything regarding applying until you are a veteran so just see if you have any conditions that qualify. You have it pretty good. My wife was losing $1,600 a month due to the VA offset even with having a 75% DOD. So she would have lost out on $1,600 a month if not for CRSC so that was a lot scarier scenario if she didn't have any conditions that qualified for CRSC.
 
Sir,

Thank you for the quick response. Good to hear about your wife getting the proper benefits.

All my disabilities are rated with the necessary Combat Code to qualify for CRSC. I just want to back brief and confirm which source is correct and that I will be receiving $5243 per month prior to CRSC despite retiring prior to 20 years of service.

  • I’m retiring under Chapter 61 with 9 years of service, 70% DoD, 100% VA (with spouse + 3 kids), High-3 of $7,490.
  • My Chapter 61 pension is about $5,243/month.
  • I’ll receive full VA pay ($4,306), plus part of my DoD pension—but only up to the legal cap of VA + earned pension ($1,348), totaling about $5,654/month.
  • That means I’m missing around $411/month due to the VA offset.
  • CRSC is the only way to recover that amount, and I can’t apply until I’m officially retired.
  • If CRSC is approved, it replaces the offset and is non-taxable.

Please let me know if I misunderstood anything. Thanks again.
 
Dreham said:
Sir,

Thank you for the quick response. Good to hear about your wife getting the proper benefits.

All my disabilities are rated with the necessary Combat Code to qualify for CRSC. I just want to back brief and confirm which source is correct and that I will be receiving $5243 per month prior to CRSC despite retiring prior to 20 years of service.

  • I’m retiring under Chapter 61 with 9 years of service, 70% DoD, 100% VA (with spouse + 3 kids), High-3 of $7,490.
  • My Chapter 61 pension is about $5,243/month.
  • I’ll receive full VA pay ($4,306), plus part of my DoD pension—but only up to the legal cap of VA + earned pension ($1,348), totaling about $5,654/month.
  • That means I’m missing around $411/month due to the VA offset.
  • CRSC is the only way to recover that amount, and I can’t apply until I’m officially retired.
  • If CRSC is approved, it replaces the offset and is non-taxable.

Please let me know if I misunderstood anything. Thanks again.
Click to expand...
You got it. So that $411 offset if approved for CRSC will be tax free. For the money for the pension after VA offset will be taxable unless the PEB determined the unfitting conditions combat related. So in your scenario you get VA tax free. Chapter 61 pension amount is taxable or not taxable depending on if your chapter 61 pension is exempt from taxes. Then CRSC is non taxable. To get the trifecta of everything non taxable you need PEB to state combat related for unfitting conditions and be approved for CRSC to get the rest which will be non taxable.

My wife was approved for 80% CRSC so she got maxed out at $1,600. She had one unfitting condition designated as combat related by the PEB so her chapter 61 pension amount after VA offset was non taxable too and of course her VA compensation is non taxable.

Also, look into options for SBP. I think its a ripoff personally. So my wife chose Low cost SBP option which only charges 2.5% up to the threshold amount. My wife has life insurance in place already which is much cheaper. Her chapter 61 pension was just over 6k and so if she chose 100% SBP she would have been paying a monthly premium of about $400 a month to only get a $3,300 monthly payout to me if she died. Instead she chose the threshold option which costs $30 a month and pays out about $600 a month. Then she has a life insurance product that covers her until she reaches the period where I qualify for DIC. That is typically 5 years if P&T by the VA from the start or 10 years if not P&T immediately after getting out.
 
Sir,

Thank you for confirming the information. Yes my unfitting condition is due to combat and is labeled as such.

Your wife retired prior 20 years of service correct?

Very interesting and relevant timing on the SBP. I was actually looking at the form waiting to fill it out. I did in fact elect to do the $400 a month (max SBP for wife and kids). I am going to re-think this and try what you recommend.
 
Dreham said:
Sir,

Thank you for confirming the information. Yes my unfitting condition is due to combat and is labeled as such.

Your wife retired prior 20 years of service correct?

Very interesting and relevant timing on the SBP. I was actually looking at the form waiting to fill it out. I did in fact elect to do the $400 a month (max SBP for wife and kids). I am going to re-think this and try what you recommend.
Click to expand...
Wife had 17AFS.
 
Great. Thank you Sir.

I am definitely going to take this info back with me. I wanted to make sure before I talked with the separation folks again.
 
Sir,

I just went to the VA office on Ft. Bragg and they informed me that no such program exists that allows medically retired service members with less than 20 years receive any residual retired pay. The only entitlements authorized in my case are VA 100% pay and CRSC. I was really hoping you could help me understand. Thank you for your time.
 
Dreham said:
Sir,

I just went to the VA office on Ft. Bragg and they informed me that no such program exists that allows medically retired service members with less than 20 years receive any residual retired pay. The only entitlements authorized in my case are VA 100% pay and CRSC. I was really hoping you could help me understand. Thank you for your time.
Click to expand...
You were informed incorrectly. It is rank/grade x time dependent. Typically its higher ranking officers that receive residual pay upon Chapter 61 retirement regardless of completing 20 active years or not.
 
Thank you for the information. The VA employees really would not let me finish my questions with context.

So residual retired pay via Chapter 61 retirement is somewhat of a rare occurrence? Regardless, I can financially plan based on 70% x High 36 Base Pay?

Thank you again for your time and help. I don't want to leave the Army and it sucks when they treat you poorly for even asking questions. I really appreciate this forum for not making me feel like a piece of shit.
 
Its no prob. Ask away...

In my experience very few VA employees seem to have accurate working knowledge of Chapter 61 medical retirement in detail.

Simply put... Will a service members DoD pay or VA pay be higher?

If the DoD pay is higher, then subtract the total VA pay. What ever number is left is the amount of DoD pay the service member keeps along with all their VA pay. Very few members may also qualify for some CRSC pay in this situation, but it is extremely rare.

If the DoD pay is lower, then the service member just keeps their VA pay. To possibly make up for some of that lost DoD pay, the service member can apply for CRSC if they qualify.
 
Understood. Thank you for that clarification. I really appreciate all the advice and help.
 
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