Concurrent Retirement and Disability Pay: A Comphrensive Guide

For military retirees navigating the intricate realm of benefits, understanding concurrent retirement and disability pay (CRDP) is paramount. This invaluable program bridges the gap between military retirement compensation and disability benefits, ensuring that those who have served their nation receive the financial support they deserve. In this comprehensive guide, we will delve into the intricacies of CRDP, exploring eligibility criteria, entitlement calculations, and the application process, empowering you to make informed decisions about your well-earned benefits.

The Essence of Concurrent Retirement and Disability Pay

Concurrent retirement and disability pay (CRDP) is a federal program that allows eligible military retirees to receive both their full military retired pay and disability compensation from the Department of Veterans Affairs (VA) concurrently. Historically, retirees were required to waive a portion of their retired pay equal to the amount of VA disability compensation they received, a practice known as the VA waiver.

However, recognizing the sacrifices of our nation's service members, the government introduced CRDP as a means to eliminate this offset, ensuring that disabled retirees receive the full compensation they are entitled to from both sources.

Eligibility Criteria for CRDP

To qualify for CRDP, military retirees must meet specific criteria. These requirements vary based on the circumstances of their retirement, ensuring that the program benefits those who have dedicated a significant portion of their lives to military service.

Eligibility for Non-Disability Retirees

For retirees who did not retire under the military's disability retirement system (Chapter 61 of Title 10, United States Code), the eligibility criteria for CRDP are as follows:

• The retiree must be entitled to receive both military retired pay and VA disability compensation in the same month.
• The retiree's service-connected disability rating, or the combined rating for multiple disabilities, must be 50% or higher according to the VA's disability rating schedule.

Eligibility for Disability Retirees

Retirees who were retired under Chapter 61 for disability face additional requirements to qualify for CRDP:

• The retiree must have completed 20 years or more of creditable service under the applicable retirement system (10 U.S.C. § 1405 or 10 U.S.C. § 12732).
• The retiree must be entitled to receive both military disability retired pay and VA disability compensation in the same month.
• The retiree's service-connected disability rating, or the combined rating for multiple disabilities, must be 50% or higher according to the VA's disability rating schedule.

It's important to note that disability retirees with less than 20 years of creditable service are not eligible for CRDP and remain subject to the VA waiver, requiring a dollar-for-dollar offset of their military retired pay to receive VA disability compensation.

Entitlement Calculations for Non-Disability Retirees

For non-disability retirees who meet the eligibility criteria, the calculation of CRDP entitlement is straightforward. Since January 1, 2014, these retirees have been eligible to receive their full military retired pay concurrently with their VA disability compensation, without any offsets or reductions.

Example: Suppose a regular component service member completed 20 years of active service and voluntarily retired based on longevity in 2020. They receive $800 per month in gross retired pay. Additionally, the member is entitled to VA disability compensation based on a service-connected disability rated at 50% by the VA, amounting to $1,200 per month. Under CRDP, this retiree would receive their full military retired pay ($800) concurrently with their VA disability compensation ($1,200), without any offsets or reductions.

Entitlement Calculations for Disability Retirees

For disability retirees with more than 20 years of creditable service, the calculation of CRDP entitlement is more complex. These retirees must still waive a portion of their retired pay to receive VA disability compensation, but the waiver amount is limited.

The waiver amount is calculated as the difference between the disability retired pay and the hypothetical retired pay the member would have received if they had retired under a non-disability retirement system, such as the longevity-based retirement system.

Example: Suppose a regular component service member retired under Chapter 61 for disability in 2020 after completing more than 20 years of creditable service. The member is also entitled to VA disability compensation based on a service-connected disability rated at 50% by the VA. Under CRDP, this retiree would receive concurrent military disability retired pay equal to the amount they would have received had they retired for longevity or years of service. Any remaining portion of their military disability retired pay would be subject to the VA waiver.

Special Considerations for Reserve/Guard Members

Reserve and National Guard members who receive a Notification of Eligibility for Retired Pay at Age 60 (NOE) and are later retired under Chapter 61 for disability with immediate retired pay face additional complexities regarding their CRDP entitlement.

In these cases, concurrent retired pay may not be paid until the member reaches the eligibility age at which they would have otherwise been required to start receiving military retired pay, had they not been retired under Chapter 61 for disability.

It is crucial for Reserve/Guard members in this situation to contact their respective branch of service to determine their eligibility age, creditable service, and points. The branch must then provide this information directly to the Defense Finance and Accounting Service (DFAS) to ensure the proper calculation and initiation of concurrent retired pay at the appropriate eligibility age.

Applying for CRDP: A Streamlined Process

In most cases, CRDP is automatically initiated by DFAS without the need for a separate application from the retiree. This is due to the seamless information-sharing between DFAS and the VA regarding disability compensation.

However, if a retiree believes they are entitled to CRDP but is not receiving the payments, they can submit a written claim to DFAS using the DD Form 827 (Application for Arrears in Pay). This form can be submitted by mail, fax, or through the online askDFAS upload tool.

For Reserve/Guard members retired under Chapter 61 for disability before eligibility age, it is essential to contact their branch of service to ensure that retirement orders are forwarded to DFAS, enabling the initiation of concurrent retired pay at the appropriate eligibility age.

Retroactive CRDP Payments: Recouping Past Entitlements

If a retiree's VA disability rating changes after they begin receiving retired pay, they may be eligible for retroactive CRDP payments. When DFAS receives updated VA disability compensation information, they will audit the retiree's pay account to determine if any retroactive concurrent retired pay or disability retired pay is owed.

This audit process involves researching pay information from DFAS, the VA, and the retiree's branch of service. The retroactive payment date can potentially go back as far as January 1, 2004, but it may also be limited by factors such as the retiree's retirement date, the date their disability rating first reached 50% or higher, or the specific circumstances of their case (e.g., Chapter 61, non-regular service, etc.).

If DFAS determines that the retiree is also owed retroactive VA disability compensation from the VA, they will forward an audit to the VA, who is responsible for paying any outstanding amounts.

Understanding the VA Waiver and Its Impact

While CRDP aims to eliminate the offset between military retired pay and VA disability compensation, it is essential to understand the underlying VA waiver concept.

The VA waiver is a general rule of law that prohibits military retirees from receiving both VA disability compensation and military retired pay concurrently. Instead, retirees are required to waive their military retired pay, dollar for dollar, to receive VA disability compensation.

CRDP provides a limited exception to this general rule, allowing eligible retirees to receive both forms of compensation simultaneously. However, for those who do not qualify for CRDP or other concurrent receipt programs, the VA waiver remains in effect, necessitating the offset of retired pay to receive VA disability compensation.

Comparing CRDP and Combat-Related Special Compensation (CRSC)

In addition to CRDP, military retirees may also be eligible for Combat-Related Special Compensation (CRSC), another program designed to mitigate the impact of the VA waiver. While both programs aim to restore retired pay affected by the VA waiver, they differ in their eligibility criteria and calculation methods.

CRSC provides a monthly payment equivalent to the offset in military retired pay due to the receipt of VA disability compensation determined to be combat-related. Eligibility for CRSC is based on having a combat-related disability rating from the VA, regardless of the overall disability rating percentage.

Retirees cannot receive both CRDP and CRSC simultaneously; they must choose one or the other. In some cases, CRDP may be more advantageous, particularly if the retiree's overall VA disability rating is higher than their combat-related disability rating.

It is crucial for retirees to carefully evaluate their specific circumstances and consult with knowledgeable professionals to determine the most beneficial option between CRDP and CRSC.

Open Season: Choosing the Right Path

Retirees eligible for both CRDP and CRSC have the opportunity to choose the more advantageous option each year during an "Open Season" period, typically in December. DFAS or the retiree's pay agent will send an Open Season letter, allowing the retiree to make an informed decision based on their unique circumstances.

This annual choice ensures that retirees can optimize their benefits and receive the maximum compensation they are entitled to, based on their disability ratings and the specific characteristics of each program.

Navigating the Complexities: Seeking Professional Guidance

While this comprehensive guide aims to provide a solid understanding of CRDP, the intricacies of military retirement and disability benefits can be intricate and ever-evolving. It is strongly recommended that retirees seek professional guidance from knowledgeable sources, such as financial advisors, veterans service organizations, or legal professionals specializing in military benefits.

These experts can provide personalized advice tailored to individual circumstances, ensuring that retirees make well-informed decisions and maximize their hard-earned benefits.

Frequently Asked Questions

1. Can I receive both CRDP and CRSC simultaneously?

No, retirees cannot receive both CRDP and CRSC concurrently. They must choose one or the other program based on their specific circumstances and which option provides the greater financial benefit.

2. Do I need to apply for CRDP separately?

In most cases, DFAS will automatically initiate CRDP payments based on the information shared by the VA regarding disability compensation. However, if a retiree believes they are eligible but not receiving CRDP, they can submit a written claim to DFAS using the DD Form 827.

3. Are CRDP payments taxable?

Yes, CRDP payments are considered taxable income, as they are part of the retiree's military retired pay.

4. Can CRDP payments be retroactive?

Yes, if a retiree's VA disability rating changes after they begin receiving retired pay, they may be eligible for retroactive CRDP payments. DFAS will conduct an audit to determine if any retroactive concurrent retired pay or disability retired pay is owed, potentially dating back to January 1, 2004, subject to certain limitations.

5. How do I choose between CRDP and CRSC during the Open Season?

DFAS or the retiree's pay agent will send an Open Season letter each December, allowing the retiree to choose the more advantageous option between CRDP and CRSC for the following year. Retirees should carefully evaluate their specific circumstances and consult with knowledgeable professionals to make an informed decision.

Conclusion

Navigating the intricate landscape of military retirement and disability benefits can be a daunting task, but understanding Concurrent Retirement and Disability Pay (CRDP) is crucial for ensuring that disabled retirees receive the compensation they deserve. This comprehensive guide has provided an in-depth exploration of CRDP, covering eligibility criteria, entitlement calculations, application processes, and the nuances of disability and non-disability retirements.

By empowering retirees with knowledge and resources, we aim to facilitate informed decision-making and optimize the benefits they have earned through their unwavering service to our nation. Remember, seeking professional guidance and staying updated on the ever-evolving regulations is essential to maximizing your hard-earned benefits.

At our core, we remain committed to supporting our military retirees and their families, ensuring that their sacrifices are honored and their financial well-being is safeguarded. Together, we can navigate the complexities of CRDP and unlock the full potential of the benefits you have rightfully earned.