Concurrent Receipt Update

effective January 1, 2004

IN PLAN ENGLISH THIS IS WHAT IT THE UPDATE MEANS, READ THE DATA BELOW

Example rate for a Veteran with a Spouse

(In today’s dollars, not taking in account yearly cost of living allowance)

Chart made by 173rdAirborne.com from data available at;

http://www.moaa.org/Legislative/WeeklyUpdate.asp#Issue%201

The change will benefit as many as 200,000 disabled retirees in two ways:

• First, all retirees with at least 20 years of service and VA disability ratings of 50% or higher will see their military retired pay offsets phased out over a ten-year period starting January 1, 2004.

• Second, the recently enacted Combat Related Special Compensation (CRSC) will be expanded to include all combat- or operations-related disabilities from 10% to 100% ratings, also effective January 1, 2004.

In both cases, Guard and Reserve retirees with 20 qualifying years of service (including those with less than 7,200 retirement points) will be eligible.

CRSC payments are in the amount of the VA disability compensation paid for whatever percentage of the members disability rating is due to combat-related disabilities, as determined by the parent service. Retirees must apply to their parent service for CRSC payments, but there is no phase-in period for CRSC. DoD is discouraging all those not currently eligible for CRSC from applying until this provision is signed into law.

Disabled retirees rated 50% and higher who do not elect CRSC payments should start seeing their retired offset phased out automatically, starting January 1, 2004. No application is expected to be required. For 2004, qualifying retirees should see their retired pay increase by a flat amount, depending on disability, as follows:

$750 for 100% disabled; $500 for 90%; $350 for 80%; $250 for 70%; $125 for 60%; and   $100 for 50%.  

The remaining retired pay offsets would then be phased out over the following nine years. In 2005, they would get back another 10% of any remaining offset; in 2006, they would get back 20% of the remaining offset; in 2007, 30% of the remaining offset; and so on. By January 2014, disabled retirees with 50% and higher ratings will be entitled to full concurrent receipt of military retired pay and VA disability compensation.

Disabled retirees who qualify for both programs would have to choose one or the other. Because the CRSC program provides full payment immediately vs. the 10-year phase-in for concurrent receipt, legislators plan to allow an annual election option for CRSC-eligibles. This recognizes that a retiree who is 100% disabled, but only 60% of that is due to combat-related conditions, may find it advantageous to elect full CRSC payments for a few years until the concurrent receipt payment rises to a level that exceeds the CRSC payment. Because CRSC payments are tax-free and nondisability retired pay is not, this could also figure into qualifying retirees election decisions.

Designing specific procedures for retirees to make such elections is but one of the many administrative challenges the Defense Department will have to address in implementing the new authority.

The new agreement also calls for the formation of a special commission to review the VA disability system and recommend any needed changes. Of its 13 commissioners, at least seven will have to be highly decorated veterans. Four will be appointed by the House, four by the Senate, and five by the Pentagon and/or the VA.

"This is an extremely gratifying victory for disabled retirees," says VADM Norbert R. Ryan, Jr. (USN-Ret), President of MOAA. MOAA is extremely pleased that years of lobbying efforts by MOAA and others have paid such great dividends for thousands upon thousands of disabled servicemen and women. This new legislation wont solve the whole concurrent receipt problem, but its a giant step forward that will mean as much as $25,000 a year or more for 100% disabled retirees. We deeply appreciate the efforts of legislators who have fought so hard on this issue. {Source; http://www.moaa.org/Legislative/WeeklyUpdate.asp#Issue%201}

173rdAirborne.com