Podcast Episode 0043 – “But My PEBLO said…” The Truth About Concurrent Retired and Disability Pay

 

It’s time to do some myth busting about CRDP.  Here’s the real story.

 

References:
Concurrent Retirement and Disability Pay (CRDP) (DFAS)
VA vs Drill Pay (PowerPoint Presentation)
VA Math Made Simple
10 USC 12731: Age and service requirements
10 USC 12731b: Special rule for members with physical disabilities not incurred in line of duty

Related YouTube Episodes:
Should I Take Drill Pay or VA Compensation?
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO

Related Podcast Episodes:
Should I Take Drill Pay or VA Compensation?
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO

Related Articles:
Should I Take Drill Pay or VA Compensation?
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”

 


Bonus Episode 0002 – Veterans Can Now Apply for VA Identification Cards

https://youtu.be/yWBzJds3b4k

Veterans can now apply for ID cards through the VA and will no longer need to carry around DD 214s or other documents to prove their service.

Log in to Vets.gov using either the ID.me verification system or a DS log-in to apply for a new veterans ID card.

http://www.military.com/daily-news/2017/11/29/veterans-can-now-apply-for-va-identification-cards.html


YouTube Episode 0045 – “But My PEBLO said…” The Truth About Concurrent Retired and Disability Pay

 


https://youtu.be/a0bNv4o3tmc

References:
Concurrent Retirement and Disability Pay (CRDP) (DFAS)
VA vs Drill Pay (PowerPoint Presentation)
VA Math Made Simple
10 USC 12731: Age and service requirements
10 USC 12731b: Special rule for members with physical disabilities not incurred in line of duty

Related YouTube Episodes:
Should I Take Drill Pay or VA Compensation?
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO

Related Podcast Episodes:
Should I Take Drill Pay or VA Compensation?
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO

Related Articles:
Should I Take Drill Pay or VA Compensation?
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”


The Temporary and Permanent Disability Retirement Lists

You’ve finally made it through the maze of the medical board journey, your branch of service has given you a disability rating, and you are about to be medically retired.  What in the world does all of that mean?  Here is the skinny on the disability retirement lists.  This will be a long article so please read it carefully.

 

What are they?

These are essentially active duty retirements (even if you are a reservist) with benefits starting right away.  You do not have to wait until sixty like the usual reserve retirement.  The Temporary Disability Retired List (TDRL) and the Permanent Disability Retired List (PDRL) are statuses given to service members who have long-term medical disabilities and are no longer able to perform their military duties as a result.  These service members also have a combined disability rating (see my article on medical boards, “Beware the IDES of Medical Boards…?” for an explanation on how this works.  I’ll include a link in the notes below.

 

Eligibility

If your injuries are long-term and you have a disability rating from your branch of service of at least 30% then you can be placed on the permanent disability retired list (PDRL).  If you have a possibility of recovering from your injuries within a certain amount of time, usually three years or less, then you can be placed on the temporary disability retired list (TDRL).

 

Service members on the TDRL will be on the list for a maximum of three years and will have their conditions reevaluated at least every eighteen months.  If you have recovered sufficiently then you will be removed from the list and returned to service.  If you have not recovered (more likely) then you can either be offered a severance package or transferred to the PDRL.

 

Benefits

For members on the TDRL, the minimum amount of retired pay is fifty percent of active duty base pay (even if your branch of service’s disability rating is lower than that) up to a maximum of seventy-five percent (even if your branch of service’s disability rating is higher than that).  Keep in mind that your final rating from your branch of service (BOS) can go down when you are reevaluated.  This downgrade can result in severance if your rating goes below thirty percent.  If you are transferred to the PDRL then your rate of pay will be based on your final disability rating (determined upon reevaluation).

 

Members on the PDRL will receive retired pay based on their active duty base pay and their final disability rating.

 

A benefit often more valuable than the amount of retired pay is Tricare health care benefits.  Tricare is available not only for the service member but also his spouse and dependent children.  Make sure they are registered in the Defense Enrollment Eligibility Reporting System (DEERS) – the same database used to determine which ID card you receive – since this is what is referenced by Tricare whenever you try to use your health benefits.  I usually tell people that Tricare is easily worth at least $1,000 per month in value.

Service members on either of these retirement lists are eligible for a blue (retired) ID card.  Their dependents are eligible for tan cards.  These cards allow you to use all of the on-post (and off-post) benefits received by any other military retiree (such as discounts at civilian businesses).  Be sure to take your disability order with you when you show up to get new cards for everyone.

 

You should get the cards around a week or so from your orders’ effective date.  You can do it within a week after this date, as well.  Don’t wait any longer than this, though, or you may have problems with DEERS.  Be sure the DEERS operator lists you as a retiree (not a reserve retiree) when he updates your record.

 

Applying for Pay

I recommend getting the help of a retirement services officer (RSO) for this part of things.  While the pay application can appear simple at first, there are many areas where mistakes can be made.  Errors on the application can delay the start of your benefits (until they are fixed).  An RSO will know how to do everything correctly.

 

Use DD Form 2656 to apply for retired pay.  Other than a few supporting documents, you will not need to complete any other forms (they just have the same information as the DD 2656 anyway).

 

The supporting documents for most people on the PDRL or TDRL are just the disability order (the one with your rating on it not your discharge from your branch of service) and your final retirement points statement. I’ll include an example from the Army in the notes below.  Expect about two months from the time the application is sent to the Defense Finance and Accounting Service (DFAS) for pay to begin.

 

If you have a twenty-year letter, it is a good idea to include that letter and your reserve component survivor benefit plan election, as well.  Don’t worry. You’ll get back pay from the effective date of your disability order to the present. You won’t lose any money.

 

How VA Compensation Affects Pay

Just like any other type of military pay, compensation from the Veterans Administration will offset – dollar for dollar – anything you get from the military.  There is a thing called Concurrent Retired and Disability Pay  (often simply called concurrent receipt) – or CRDP for short – which allows for this offset not to happen if you have at least a 50% rating from the VA, but this does not apply for medical retirements.  There is also a type of pay called combat-related special compensation which makes up for some or all of the VA offset.  You might be eligible for both of these but can only receive one or the other.

 

Concurrent Retired and Disability Pay (CRDP)

I just said you can’t get CRDP if you have a medical retirement, but you can choose to get this if you have twenty years of qualifying service and you have reached your retired pay eligibility date (RPED).  Your RPED is usually age sixty, but can be earlier if you have qualifying active duty service.  Talk to an RSO to see if this applies to you.  I will go deeper into the CRDP topic in next week’s article.

 

Combat-Related Special Compensation (CRSC)

CRSC sounds very similar to CRDP (probably because they both have CR in the acronym) and people very often get them confused.  Even retirement services officers and your physical evaluation board liaison officer (PEBLO) can get the facts jumbled in their minds.

 

CRSC is a type of pay for people with combat-related injuries which makes up for part (or all) of the offset between retired pay and VA compensation.  This pay does not happen automatically.  There is a separate application packet which needs to be sent to your branch of service in order to receive it.  First, though, you need to have retired pay which is being reduced by VA compensation (so be sure to apply for pay with an RSO’s assistance).  I will cover the specifics of CRSC in two weeks (after I have talked about concurrent receipt in more detail).

 

Hopefully, this was a useful article.  I don’t want to get too deep in the weeds or it might end up being more of a mind bender than it needs to be.  If I missed anything or you are confused about something, please drop a comment for me and I will answer any problems you might have.

 

Be sure to subscribe to my YouTube channel and podcast for updates on future posts.

 

Thanks for joining me today and, of course, thank you for your service.

 

D.J.

 

References:
TDRL Order Example

Related YouTube Episodes:
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO


Related Podcast Episodes
:
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?

“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO
Related Articles:
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”


Podcast Episode 0042 – The Temporary and Permanent Disability Retirement Lists

 

References:
TDRL Order Example

Related YouTube Episodes:
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO


Related Podcast Episodes
:
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?

“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO
Related Articles:
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”


YouTube Episode 0044 – The Temporary and Permanent Disability Retirement Lists


“Jackpot! I’ve Been Offered a HUGE Severance Payment.” DJ says, “Don’t Take It.”

Hello, from Fort Knox.

 

This week I’m going to talk about disability severance pay.  Once you have completed all of your medical boards and received a disability rating from your branch of service and that rating is 20% or less, you are offered a severance payment and a discharge.

 

Should you accept this payment and the discharge?  Well, I did mention last week that you had the options.  Also, the title of this article does say, “Don’t take it.”  Sometimes accepting the money is the only real option you have available to you.  Many times, though, there are other factors to consider.  I’ll describe those options shortly.

 

Let’s first talk about how severance payments are computed.  I like to talk about money, if you haven’t noticed throughout these articles.  Please also remember that you are only offered severance if you have a 20% or lower disability rating from your branch of service (BOS).  The rating you have from the Veterans Administration is totally separate and does not count as part of the consideration for severance.  Once you are offered your BOS rating, here is what happens.

 

Defense Finance and Accounting Service (DFAS) will compute your severance using the following formula.  Take two months of your active duty base pay and multiply it by your number of equivalent active duty years. What is equivalent active duty?  Very simple.  It is just your total retirement points divided by three hundred sixty.  The minimum number of years for the purpose of this calculation is six years for combat-related injuries and three years for other injuries.  The maximum number of active duty years is nineteen.

 

For you algebra folks out there, the formula would look like this.

 

(Active duty base pay X 2) X (Retirement Points ÷ 360) =  Severance Pay

 

Remember in previous articles when I talked about VA offsets to drill pay or retired pay?  The same applies here.  VA compensation will be applied against the amount of the severance.  You will also have to face the taxman at the end.

 

If you are receiving a severance for a combat-related injury and also receiving VA compensation for that same injury, it is possible to exclude the severance pay from taxation (at least on the federal level).  The is the result of what is called the “St Clair Decision” in 1991.  In order to take advantage of this exclusion and if you’re still in the current tax year, send your PEB findings and VA decision letter to DFAS.  They will compare those documents and determine whether the injuries are the same.  If you received a severance in a previous tax year, send those same documents to the IRS.  I would recommend going to a local office rather than trying to do it over the phone and by mail.

 

Back to taking a severance.

 

As you can imagine, the amounts of these severance payments can be substantial (tens or even hundreds of thousands of dollars).  It would only be natural for someone to be tempted when this sort of money is offered to them. If you take the money, though, you will lose a great many benefits which you have probably earned.

 

The key word in severance is sever (for those English enthusiasts out there) and that is exactly what happens when you accept this payment.  You have been severed from military service.  It’s like hitting the delete key on a computer.  Your service is gone.  You have no retirement benefits, no VA compensation, no Tricare, nothing.  You have been bought out.  Have a nice day.

 

But, D.J., you can recover a deleted file. Is there a way to recover “deleted” service?

As with so many things, it depends.  Let’s say you are eligible for VA compensation or wish to get medical assistance from the VA.  They will provide such compensation and assistance (dramatic pause goes here) after you have repaid the severance pay.  If you’re going to receive VA compensation, the VA will withhold that compensation until sufficient time has passed to recoup all of the severance. This can be several years.

 

If you’re trying to recover military retirement benefits, the same recoupment rule would apply (another dramatic pause) if the branch of service will allow you to do this.

 

If you have earned any sort of lasting benefit from military service (particularly financial payments), it may be a good idea to consider refusing severance pay.  This is particularly true if you have fifteen or more years of military service (and you’re currently a reservist).  If this is you then you can request transfer to the Retired Reserve.  At least this way you would still be eligible for retired pay at age sixty and have Tricare benefits.  Of course, you will need to figure out the best choice for your situation.

 

That is all for this week.

 

 

Thanks for joining me today and, of course, thank you for your service.

 

D.J.

Resources:
https://www.dfas.mil/retiredmilitary/plan/separation-payments/disability-severance-pay.html
https://www.dfas.mil/retiredmilitary/manage/taxes/isittaxable.html
St. Clair Decision Information Letter


YouTube Bonus Episode 001 – Interview With a PEBLO

https://youtu.be/KZKGHT60gYQ


Podcast Bonus Episode 001 Interview With a PEBLO


Podcast Episode 0041 – “Jackpot! I’ve Been Offered a HUGE Severance Payment.” DJ says, “Don’t Take It.”

Resources:
https://www.dfas.mil/retiredmilitary/plan/separation-payments/disability-severance-pay.html
https://www.dfas.mil/retiredmilitary/manage/taxes/isittaxable.html
St. Clair Decision Information Letter