U.S. Military (Ret.): Time to clear up confusion about concurrent receipt - Military Retirement - Navy Times

U.S. Military (Ret.): Time to clear up confusion about concurrent receipt

My recent column on Chapter 61 medical retirees produced a flood of e-mails that tells me there is still a lot of confusion about the issue known as concurrent receipt.

To set the stage: Lawmakers decided in 2003 to change a law dating from the late 19th century that required disabled retirees to have their military retired pay reduced, dollar for dollar, by any amount they received in veterans disability compensation.

But because of cost concerns, Congress couldn’t bring itself to do the right thing and repeal the law all at once for all disabled retirees.

Instead, lawmakers have taken a piecemeal approach, resulting in a tangled web of programs affecting disabled retirees in very different ways, depending on their personal situations. The nuts and bolts are very complex, but I’ll try to explain the basics.

There are two programs that fall under the “concurrent receipt” umbrella and are designed to eliminate the offset in military retired pay: Concurrent Retirement and Disability Payments, or CRDP, and Combat-Related Special Compensation, or CRSC. This week, I’ll talk about CRDP.

This program, which took effect Jan. 1, 2004, has two main criteria for eligibility: You must have served at least 20 years of active service or the reserve equivalent, and you must have a service-connected disability rated by the Veterans Affairs Department at 50 percent or higher.

As mentioned above, when Congress launched CRDP, it did not eliminate the offset all at once. Instead, lawmakers mandated a phased elimination over 10 years: The offset is being reduced a little bit each year and will vanish completely for eligible retirees in 2014.

Congress has since updated CRDP. In 2005, the 10-year phase-out of the offset was eliminated for retirees with VA service-connected disability ratings of 100 percent. In other words, the most severely disabled retirees were immediately granted concurrent receipt of full military retired pay and VA disability compensation.

Another update took effect Oct. 1, 2008, when the 10-year phase-out of the offset also was eliminated for disabled retirees with formal VA disability ratings of less than 100 percent who nonetheless are considered fully disabled because their disability prevents them from holding a job.

These disabled retirees, known as “individual unemployables,” or IUs, now qualify for full concurrent receipt.

The 10-year phase-out plan remains in effect for all other eligible retirees with disability ratings of 50 percent to 90 percent.

You don’t have to apply for CRDP; the Defense Finance and Accounting Service automatically determines benefits for those who are eligible.

CRDP payments are taxable. This is important because payments under the other program, CRSC, are not taxable — and many disabled retirees are eligible for both programs.

In my next column, I’ll explain CRSC, talk about how the two programs are related and offer some resources for more information.

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Retired Command Master Chief Alex Keenan served 28 years in the Coast Guard. E-mail him at retired@atpco.com.