Army Echoes, Issue 1, January-April 2004

 New law changes concurrent receipt, CRSC

ARLINGTON, VA (DFAS) — Military retirees rated at least 50 percent disabled by the Department of Veterans Affairs (VA) will be receiving both retired pay and VA disability compensation as the VA disability offset of retired pay is phased out over the next 10 years.  The offset reduces retired pay by an amount equal to any VA disability payment.

   Legislation authorizing concurrent disability payments (CDP), that is, receipt of both forms of compensation, took effect Jan. 1, 2004, and will affect more than 200,000 disabled military retirees.  Public Law 108-136 (Sections 641 and 642) authorizes a 10-year, phased-in elimination of the VA disability offset to retired pay.   This will affect members with non-disability retirements, without regard to years of service.  Those who retired as a result of a service-related disability are also eligible; however, these members must have at least 20 years of qualifying service.   In all cases, the retiree must be rated at least 50 percent disabled by the VA. 

CRSC changes

   This legislation expands the field of eligibility for Combat-Related Special Compensation (CRSC) to include retirees with 20 years of qualifying service, who have a combined, combat-related disability of 10 percent or more.  CRSC is a tax-exempt payment which replaces retired pay lost to the concurrent receipt ban, but only for retirees with 20 or more years of service and disabilities tied to combat or combat-related training who apply and are approved.  Reserve retirees are included; people who retired under Temporary Early Retirement Authority are not.  Eligible retirees may not receive both CDP and CRSC at the same time.   The new law requires an annual “Open Season” to be conducted to allow veterans eligible for both concurrent disability payment and CRSC to choose between the two options.  Details on the annual open season are being developed.

Special Compensation repealed

   The new law also repeals the authorization for Special Compensation for the Severely Disabled (SCSD), a special payment for retirees with 20 or more years of creditable service with disabilities rated greater than 60 percent.  Since retirees who had been receiving SCSD are qualified for CDP and since there is already a database identifying them as qualified, these 37,000 retirees (15,789 Army) received the first CDP in the February retired paycheck.  Retirees who had not been receiving SCSD but who have at least 20 years of creditable service and disability ratings of 50 percent or higher will receive CDP when DFAS identifies them as eligible.

   System changes required to fully implement the legislation will take several months to complete. DFAS is working with the VA to issue payments to all eligible retirees as soon as possible.  When full implementation is completed, payments will include those due retroactively to Jan. 1, 2004. 

myPay.dfas.mil

www.dfas.mil