Maximizing Benefits: Combining VA Disability and Military Retirement Pay
OCT 5 / by CFV / VA Claims
Are you curious about the possibility of receiving both VA disability and military retirement pay simultaneously, without compromising either? The good news is that it is indeed feasible, but there are specific conditions that must be met. In this comprehensive guide, we will unravel the intricacies of how veterans can leverage their entitlements to the fullest extent.
Before delving into the intricacies of combining benefits, it's crucial to comprehend what VA disability compensation entails. This benefit is exclusively available to individuals with service-connected disabilities. If, for instance, you sustained injuries from an IED explosion while serving in Iraq, you qualify for VA disability compensation. However, if your medical condition predates your military service or is unrelated to it, you won't be eligible for these benefits
The compensation you receive is determined by the severity of your disability and can range from several hundred dollars to over $3,000 per month. Initiating the process involves filing a claim with the VA. You can either handle this independently or seek assistance from a Veterans Service Organization. Upon filing your claim, the VA will evaluate your medical records and any supporting evidence before rendering a decision.
Should your claim be approved, you will start receiving benefits, including back pay to cover the waiting period for the VA's decision (note that this doesn't extend to the time of your injury). Importantly, VA disability compensation is tax-free. If your initial claim is denied or you receive a lower rating than expected, the option to appeal to a higher authority remains open. Engaging an experienced claims agent can significantly improve your chances of success in the appeals process.
Unpacking Military Retirement Pay
It's essential to distinguish between VA disability compensation and military retirement pay, as they fall under separate government departments. The U.S. military currently operates two primary retirement systems:
1. The New Blended Retirement System (BRS)
This system, which took effect on January 1, 2018, introduces several components:
2. The Legacy High-3 System
Service members who commenced their service before December 31, 2017, typically fall under this system. It offers a retirement benefit calculated at 2.5% times the highest 36 months of basic pay.
Thrift Savings Plan contributions in this system are not matched by the government. Importantly, military retirement pay is generally considered taxable income. While retirees can receive both Social Security benefits and retirement pay, most veterans without severe disabilities must choose between military retirement pay and VA disability compensation, with the latter usually offering more substantial financial support.
Harmonizing VA Disability Compensation and Military Retirement Pay
Concurrent Retirement and Disability Pay (CRDP)
Veterans with a disability rating of 50% or higher are entitled to their full military retirement pay without any reductions. This arrangement, known as Concurrent Retirement and Disability Pay (CRDP), ensures that eligible veterans receive both benefits concurrently. However, veterans with a disability rating below 50% will see their pension reduced dollar for dollar by the amount of their VA disability compensation.
It's noteworthy that CRDP was not available before 2004, and veterans had to make a challenging choice between VA compensation and retirement pay. It took a decade for CRDP to be phased in, allowing veterans whose retirement pay was previously reduced to start receiving compensation.
While progress has been made, many advocate for a comprehensive resolution that doesn't force veterans to choose between these critical benefits. For veterans who retired after 2014, there is no need to apply for CRDP if eligible. Automatic enrollment ensures that their retirement pay remains unaffected by VA disability payments. Eligibility for CRDP encompasses various criteria:
● You are a regular retiree with a VA disability rating of 50% or higher.
● You are a reserve retiree with 20 years of service, a VA disability rating of 50% or higher, and have reached retirement age (typically 60 in most cases).
● You are retired under the Temporary Early Retirement Act (TERA) and have a VA disability rating of 50% or higher.
Concurrent Retirement and Disability Pay Back Pay
Veterans whose disability rating increases to 50% or higher, without a corresponding increase in their retirement pay, may be eligible for retroactive pay dating back to 2004. If you find yourself in this situation, don't hesitate to contact a claims agent to calculate your potential Concurrent Retirement and Disability Payback pay.
Combat-Related Special Compensation (CRSC)
To further assist veterans with combat-related disabilities in obtaining more of their retirement pay, the government has established the Combat-Related Special Compensation (CRSC) program. CRSC payments are tax-free and require veterans to meet specific criteria:
● You are entitled to military retirement pay.
● You have received a VA disability rating of 10% or higher.
● Your retirement payment is currently being reduced by the amount of your VA disability pay.
It's essential to understand that the definition of "combat-related" is quite broad. Veterans who were injured or exposed to toxic substances during their service may qualify for CRSC.
Conditions such as Agent Orange-related illnesses, burn pit exposure, radiation exposure, and Gulf War disease can potentially make veterans eligible for CRSC if these circumstances lead to the development of chronic illnesses.
Regrettably, medical retirees with less than 20 years of service do not currently qualify for CRDP. To apply for CRSC, you must submit your request through your military service branch, as it is not a VA benefit. If your initial CRSC claim is denied by your branch of service, you have the option to gather additional evidence and file an appeal. It's important to note that there is a 6-year statute of limitations for CRSC applications, so prompt action is advised.
CRDP vs. CRSC: Choosing the Right Path
CRDP and CRSC operate differently and offer veterans distinct options:
CRDP (Concurrent Retirement and Disability Pay)
CRDP restores the reduced portion of your retirement pay to the "full retirement pay" level. It does not require a separate application; eligible veterans will observe an increase in their monthly payments. However, like many government benefit programs, CRDP comes with specific conditions and fine print.
CRSC (Combat Related Special Compensation)
CRSC does not eliminate the offset between military retirement pay and VA disability pay. Instead, veterans receive reimbursement for the offset amount each month. Veterans eligible for CRSC receive three checks monthly: one from DFAS, one from the VA, and CRSC pay from their military branch of service. The choice between CRDP and CRSC can be made during an open-season election period in December, with the provided information detailing payment amounts and potential tax implications.
Pursuing a Higher Disability Rating
If you believe you deserve a higher disability rating, there are several valid reasons to reopen your disability claim:
● Your condition has worsened since your last C&P exam.
● You believe your initial rating was too low.
● You suspect a clear and unmistakable error in the VA's assessment.
● A higher disability rating could result in increased retirement pay.
It's important to note that you can reopen your claim to request a higher rating percentage at any time. This is particularly crucial if you are no longer able to work due to service-connected disabilities.
Seek Expert Guidance for Your VA Claim
At Champion For Veterans, we are committed to ensuring that veterans receive the benefits they rightfully deserve. Our claims agents are dedicated to serving veterans just as honorably as they have served our nation. With our assistance, countless veterans across the United States have navigated the claims process successfully, gaining access to the benefits they've earned.
To initiate a free consultation, complete our quick form, and we'll be in touch. We eagerly anticipate learning about your unique situation and providing any support we can.
In conclusion, navigating the complexities of VA disability compensation and military retirement pay can be challenging, but with the right information and support, veterans can maximize their benefits and secure the financial assistance they need.
Our Mission & Vision
Champions For Veterans is an organization devoted to coaching and training veterans as they pursue the VA disability rating they deserve from the Department of Veterans Affairs. Our mission is to help 100,000 veterans get the rating they deserve by 2025.
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