Combat-Related Special Compensation (CRSC) Is NOT the Same As Concurrent Receipt

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Warning!  This is a very long article.  I recommend taking it in pieces to avoid being overwhelmed by information overload.

 

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You’re almost there.  You have been medically retired. You’re receiving VA compensation and you’re getting military retirement for your disability.  Lastly, your VA compensation is offsetting your military pay.  Now you can proceed to the final step in your path to complete medical retirement.

 

“What is this last step?” you may ask.

 

If any of your disabilities are the result of direct combat, hazardous duty, or preparing for combat (like training exercises), you may be eligible for Combat-Related Special Compensation (CRSC).

 

“CRSC? That sounds like CRDP (Concurrent Retirement and Disability Pay) which you discussed last week.  Aren’t they the same thing?”

 

To put it simply, no, they’re not the same, though they’re often confused for being such.  Don’t let the similar acronyms confuse you.  CRSC is designed to make up for some or all of the VA offset you are experiencing in your retired pay if you have combat-related disabilities. It’s quite different from CRDP.

 

For starters, the eligibility for CRSC is quite different from CRDP.  For example, you do not have to have reached your reserve retired pay eligibility date (RPED, usually age sixty) in order to receive CRSC.  Let’s look at a list of the eligibility requirements.

 

Eligibility
To qualify for CRSC you must:

  • be eligible for and/or receiving military retired pay
  • be rated at least 10 percent by the Department of Veteran’s Affairs (VA)
  • have a VA offset from your retired pay
  • file a CRSC application with your Branch of Service

Source: https://www.dfas.mil/retiredmilitary/disability/crsc.html

 

Only four requirements, this looks simple, right?  Now let’s consider the types of disabilities that can be categorized as combat-related.

 

 

Disabilities that may be considered combat related include injuries incurred as a direct result of:

  • Armed Conflict
  • Hazardous Duty
  • An Instrumentality of War
  • Simulated War

Source: https://www.dfas.mil/retiredmilitary/disability/crsc.html

 

Now we’re getting into some terminology which may be confusing.  Let’s look at each one and define them a little better.

 

Armed Conflict: Direct combat, such as an injury from an improvised explosive device (IED) or a firefight, or the results of combat, such as lung damage from inhaling smoke from a vehicle burning during or after an engagement.  This can also be problems resulting from environmental issues from being in a combat theater.  However, an injury resulting while in theater, such as injuries sustained during physical training while overseas, is not enough on its own to qualify for CRSC.  There must be a document link between your injury and combat operations.

 

Hazardous Duty: Engaging in duties which are naturally considered highly dangerous, such as explosive ordinance disposal, flight, or paratrooper operations.

 

An Instrumentality of War: This is essentially military equipment such as a vehicle, vessel or other device designed primarily for military service.  The injury has to be caused by as a result of use of this equipment during training or combat and not be a result of negligence.  Simple accidents usually will not qualify.

 

Simulated War: This can be field training exercises and war games, anything in which simulated combat is taking place.  Again, there must be a documented link between the simulation of combat and your injury.

 

That should help a bit with understanding the conditions during which your sustained your disability.  It does sound a bit constraining sometimes but there is a lot of room to work here.  Remember that everything must be documented.  Your word that a disability is a result of any of these conditions won’t be enough.  I will post a list of the combat-related conditions in the references section below (look for Appendix A of DD Form 2860).

 

Applying for CRSC:

Now let’s talk about how to apply for CRSC.  Unlike CRDP, this does not happen automatically.  You do have to apply for it.  However, be sure you meet all of the requirements above first.  Your request will be denied if you do not have military retirement being offset by VA compensation. Also keep in mind that you apply for CRSC through your branch of service, not the Veterans Administration.

 

The first part of the application is DD Form 2860 (Claim for Combat-Related Special Compensation (CRSC)).  This is the easiest part of the whole shebang though it may not seem like it at the time.  I have spent over two hours with retirees on this.  It’s a lot easier if your records have been pre-sorted and the parts you need to reference are easily accessible.  Most of that time I mentioned has been spent going through hundreds of pages of documents trying to find the right things.  The last one of these I prepared for a retiree took seemingly no time at all because he had prepared his documents beforehand (a good tip).

 

Some other resources out there on the magical interwebs has already put together a good bit of information on what needs to accompany the DD 2860.  I will quote from these sources for a significant part of what follows (with occasional clarification by me in brackets).  These lists of documents are also good suggestions for how to prepare yourself for applying by sorting your records before meeting with a retirement services officer.

 

Documents to Support your CRSC Claim:

[Include] relevant supporting documentation with your CRSC claim [which] assists … in determining CRSC eligibility. Time and again, claims come in lacking supporting documentation linking the injury to a combat-related situation. Click for combat-related definitions.

 

When completing the DD Form 2860 (CRSC Claim Form), please include the following documents to verify your injuries as combat-related.

 

Essential Documents:

  1. All available DD 214s/ DD 215s. You may obtain copies online from the National Personnel Records Center (NPRC) [or your archived records section (if you are National Guard)]. Be sure to retain a copy for your records.
  2. All complete Department of Veteran’s Affairs (VA) Rating Decisions/ VA Physician Reports/ VA Medical Records (including the VA letter, the actual VA rating decisions and the VA code sheets)

 

Highly Recommended Documents:

  1. Medical Records
  2. Award Certificates and/or narratives (purple hearts)
  3. Military Medical Treatment Facility Records
  4. Military Orders

 

Suggested Documents:

  1. Military Quadrennial Physical Examinations
  2. Military Retirement Physicals
  3. Physical Evaluation Board Proceedings
  4. Clinical Records or Notes
  5. Sick Slips
  6. Western Union Casualty Notification Telegrams
  7. Officers Record Brief / Enlisted Records Brief

 

Note: DO NOT send original records, please send copies. If all you have is a copy, please be sure to retain a copy for your own records.

Source: https://www.hrc.army.mil/content/Apply%20for%20CRSC

 

As you can see, this long list of documentation lends a lot of weight to the old credo about keeping everything the military gives you.  They come in handy when you are trying to acquire benefits like CRSC.

 

Once you have finished the application, make a copy of everything (and I mean everything).  I have included the addresses where you can send the packet below.  Sorry, there is no electronic way of submitting them.

 

Army

Department of the Army

U.S. Army Human Resources Command

ATTN: CRSC Division

1600 Spearhead Division Avenue

Fort Knox, KY 40122

866-281-3254 (Toll Free)

502-613-9550 (efax)

crsc.info@us.army.mil

www.hrc.army.mil/tagd/crsc

 

 

Navy and Marine Corps

Department of Navy

Secretary of the Navy Council of Review Boards Combat Related Special Compensation

720 Kennon Street SE, Suite 309

Washington Navy Yard, DC 20374-5023

877-366-2772 (Toll Free)

CRSC@navy.mil

http://www.secnav.navy.mil/mra/CORB/Pages/CRSCB

 

 

Air Force

United States Air Force Personnel Center Disability Division (CRSC)

550 C Street West, Suite 6

Randolph AFB, TX 78150-4708

800-525-0102

AFPC.DPPDC.AFCRSC@us.af.mil

http://www.retirees.af.mil/

 

 

Coast Guard

Commander (adm-1-CRSC)

U.S. Coast Guard

Personnel Command

4200 Wilson Boulevard

Arlington, VA 22203-1804

1-800-772-8274

www.uscg.mil/hq/cgpc/adm/adm1.htm

 

 

NOAA Corps

Director, Commissioned Personnel Center

8403 Colesville Road, Suite 500

Silver Spring, MD 20910-6333

 

 

Public Health Service

United States Public Health Service

Compensation Branch

Program Support Center, ESS

5600 Fishers Lane, Room 4-50

Rockville, MD 20857-0001

 

Reconsiderations:

Here is a quick note about reconsideration of claims which I borrowed from the Defense Finance and Accounting Service (DFAS).

 

If you are reapplying for new disabilities, request a reconsideration application from your service branch.

 

Army: you can find a reconsideration application and instructions at https://www.hrc.army.mil/site/crsc/reconsiderations.html

Navy/Marines: you can find a reconsideration application and instructions at http://www.secnav.navy.mil/mra/CORB/Pages/CRSCB

Air Force: Call 800-525-0102 concerning reconsideration

 

Mail or fax your application to your branch of service. You can’t submit it electronically.

Source: https://www.dfas.mil/retiredmilitary/disability/applyforcrsc.html

 

 

 

As with so many things in the retirement world, I do not recommend trying to do all of this yourself.  This is easily one of the most complicated things you can do. It’s not like taxes, but it can be a beast.  If you need assistance completing the application for CRSC, contact a retirement services officer or your branch of service.

 

CRSC is not fast.  I have seen it take a minimum of six months and sometimes more to get a decision from a branch of service.  At least on the Army side, your RSO should be able to track the status of your application using the Soldier Management System (SMS) website located at https://www.hrcapps.army.mil/iws/.

 

Other considerations:

Information, planning, and timing are critical with CRSC.  I have seen three people bitten hard by lack of knowledge when it comes to medical retirements.  I know there are many more out there.  In fact, I would not be surprised if there is a class-action lawsuit in the future regarding the results of this lack of information.  Here is what I mean.

 

As a worst-case example, let me tell you about one individual who was medical retired from active duty.  In his situation, he was medically retired, was receiving VA compensation, and was receiving retired pay from the military.  The problem: there was no offset as a result of the VA payments.  For some reason, the VA and DFAS computes did not sync as they normally do and the offset did not begin for almost two years.

 

Can you see what was going to happen?  I bet you can.  He got a nasty-gram from DFAS saying he owed them over $70,000 in overpaid retirement as a result of the VA offset not occurring. He also had not applied for CRSC so there was no way to take care of this debt easily.

 

As you have learned from this poor fellow, it is imperative that you be aware of how military and VA pay are supposed to work.  If you don’t see an offset in your pay, contact someone immediately.  Also, if you think you are eligible, apply for CRSC right away.  Don’t wait.

 

Here is another thing to keep in mind.  It is possible to be eligible for both CRDP and CRSC.  You can only get one however. For reservists, this means you have reached your retired pay eligibility date and you have a VA rating of at least fifty percent.  DFAS will contact you in writing and ask you which of the two you would prefer to receive. You must choose which is best for you.  Since CRDP is taxable and CRSC is not, this is usually an easy decision.  Your situation may differ, though.

 

I said I would compare CRDP and CRSC.  This is already a long article, though.  You’re probably weary of reading and I am certainly getting tired of writing (with its current formatting in MS Word, including the references below, it’s eleven pages already and I’m not finished. Who knows how long it will be when I post it to the blog).  I am going to use one of those web resources I mentioned and post a comparison which has already been written in the references section.

 

I hope this has helped somewhat in understanding the basics of Combat-Related Special Compensation.  I am sure there is still a lot of confusion.  For this reason, I welcome all questions you may have.  Please post them in the comments section or email me directly at dj@rcretirement.com.  I will answer them all for you.  Who knows?  Your question might spark another article.  Be sure to check all of the reference material below, as well.

 

If you believe this article would be useful to someone else, please share a link to it with those other people.  Also, be sure to spread the word about this site.  Don’t worry about the slow load times it currently has.  I am working on a site rebuild which should alleviate that problem.

 

For those of you on YouTube, I ask that you subscribe and comment on the video about this topic (and the others, naturally).  The more the channel grows, the more I can do for currently serving and retired military members and their families.

 

If you’re listening to this in podcast form, I similarly ask that you subscribe to the podcast feed in iTunes.  Writing reviews about the podcast also helps spread the word about it and encourages to subscribe to it and benefit from the knowledge it can provide.

 

As always, thanks for joining me today and being part of this audience.  Lastly, but not the least, of course, thank you for your service.  Have a great day.

 

D.J.

References:
Combat Related Special Compensation (CRSC) (DFAS)
Applying for CRSC (DFAS)
Comparing CRSC and CRDP
DD 2860 – Claim for Combat-Related Special Compensation – Blank.pdf
Army CRSC Reference Guide
Combat-Related Special Compensation (CRSC) and Concurrent Retirement Disability Pay (CRDP)
Additional Monetary Benefits for Eligible Military Retirees
CRSC Eligibility
CRSC Guidance
Combat-Related Codes (Appendix A from DD Form 2860)

Related YouTube Episodes:
Help, I Need My Records. Where is My DD 214?
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
“But My PEBLO said…”  The Truth About Concurrent Retired and Disability Pay

Related Podcast Episodes:
Help, I Need My Records. Where is My DD 214?
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
“But My PEBLO said…”  The Truth About Concurrent Retired and Disability Pay

Related Articles:
Help, I Need My Records. Where is My DD 214?
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.”
“But My PEBLO said…”  The Truth About Concurrent Retired and Disability Pay


“But My PEBLO said…” The Truth About Concurrent Retired and Disability Pay

We’ve all heard the confusing comments from barracks lawyers and frustrated people going through medical boards. No one statement seems to match with another and it just annoys us all the more.  What does it all mean?

 

In fact, what do I mean?  I’m talking specifically about those service members who have received a disability rating and are talking about how much money they are going to be paid each month.

 

“My VA rating is fifty percent.  My PEBLO (Physical Evaluation Board Liaison Officer) says this means I’m going to get my disability retirement and my VA compensation at the same time. Isn’t that great?”

 

Sound familiar?  We’ve heard this song before.  The service member is talking about Concurrent Retirement and Disability Pay in this situation. He believes he will get disability retired pay and VA compensation without an offset as a result of the VA payment.  Sadly, what he has been told usually isn’t correct.

 

“Why is that?” you may ask.

 

The answer is a bit convoluted because there are so many possible factors involved.  Here are a few of those possibilities.  Keep in mind that I am not trying to bash anyone when I say these things.  I’m just stating my observances based on prior experience.  Even though it is talking about drill pay, I recommend my article “Should I Take Drill Pay or VA Compensation?” for more information.  The same things I describe there as far as VA offset still apply to retired pay (although you don’t have to choose whether to receive one or the other like you do with drill pay).

 

Many PEBLOs and MSCs (Military Service Coordinators, the VA side of medical boards) are what I call “active duty-centric.”  This means they are looking at things from an active duty perspective and often do not understand how reserve retirement works (obviously, not all of them are this way).  This centrism creates a great deal of confusion and frustration for reservists.

 

Often, these PEBLOs and MSCs are new to their jobs or – just a bad – their cases loads are constantly being shuffled.  Many reservists going through medical boards have several different PEBLOs during their journey.  This lack of continuity again can lead to confusion when each of these PEBLOs tell a different story.

 

For those new PEBLOs out there, they are still learning their jobs and can give partial or conflicting information.  I wouldn’t blame them for intentionally misleading their clients; they’re just not yet sure of the facts.  I recommend checking with a retirement services officer to verify what you have been told (sometimes RSOs are new too so be forewarned).

 

Worst of all, it is very easy to confuse Concurrent Retirement and Disability Pay (CRDP) with another similar sounding type of pay called Combat-Related Special Compensation (CRSC).  These two programs sound identical when you first look at them.  You have to look carefully at the criteria in order to tell the two apart.  PEBLOs and MSCs can get baffled at the requirements of the two just like anyone else.

 

So, what is the truth about CRDP?  What is it?  How does it actually work?  Concurrent Retired and Disability Pay (often called Concurrent Receipt for short) allows for service members who are fully eligible to receive a length of service retirement (usually meaning you have at least twenty qualifying years) to also receive VA compensation without an offset if they also have a minimum VA disability rating of fifty percent (this is different from the disability rating from your branch of service).  That’s a long sentence.  Let’s make it easier.  If all of the following apply to you then you’re eligible for CRDP:

  • You have at least twenty qualifying years of service
  • You have a 50% or higher VA rating
  • You are old enough to receive your reserve retirement

 

Medical disability retirements are not considered length of service retirements and are not eligible for concurrent receipt.  This is not something written into military regulations as a way to disqualify some retirees.  This is part of federal law (sorry, Charlie).

 

To dig deeper into the specific requirements to receive CRDP, I will loosely quote from the Defense Finance and Accountings Service’s (DFAS) website and try to explain it for you.

 

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You may be eligible for CRDP if…

  • You are a regular (active duty) retiree with a VA disability rating of 50 percent or greater.
  • You are a reserve retiree with 20 qualifying years of service, who has a VA disability rating of 50 percent or greater and who has reached retirement age. (In most cases the retirement age for reservists is 60, but certain reserve retirees may be eligible before they turn 60. If you are a member of the Ready Reserve, your retirement age can be reduced below age 60 by three months for each 90 days of active service you have performed during a fiscal year.)
  • You are retired under Temporary Early Retirement Act (TERA) and have a VA disability rating of 50 percent or greater. This is another type of active duty retirement and does not apply to reservists (unless you’re AGR but this is still not applicable in the case of medical retirements).
  • You are a disability retiree who earned eligibility for retired pay under any provision of law other than solely by disability (emphasis mine), and you have a VA disability rating of 50 percent or greater. You might become eligible for CRDP at the time you would have become eligible for retired pay (reserve retirement at age sixty).

 

(Loosely quoted – with some additions and modifications –  from https://www.dfas.mil/retiredmilitary/disability/crdp.html. Page updated October 9, 2013)

 

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As you can see (hopefully), reservists who are not yet eligible for the retired pay they have already earned (meaning at age sixty) are also ineligible for CRDP.  VA compensation is still going to offset – dollar for dollar – anything you get from medical retirement pay.  This is an often heartbreaking and financially stressful fact for many reservists to learn.  It is better to know the facts though than to be hit with this revelation later when you are not prepared for it.

 

You don’t actually (or maybe I should say usually) apply for CRDP.  I have seen this happen both ways so I will describe both for you.

 

When I assist disability retirees with applying for pay (and this is specifically talking to you RSOs out there), I will check their records to see if they have at least twenty qualifying years for reserve retirement (meaning I look for a twenty-year letter).  If I see they’re have met that requirement, I include the twenty-year letter and final retirement points statement with the application for pay.  This lets DFAS know the retiree will be eligible for CRDP in the future.

 

Sometimes notifying DFAS of the retiree’s eligibility for CRDP hasn’t worked.  In this case, I have sent the usual retired pay documents (DD 2656, DD 108, twenty-year letter, retirement points, discharge order, and RCSBP election…don’t worry about all the acronyms for now) to the member’s branch of service and had them (the BOS) go through their usual machinations.  The branch of service produces a statement showing all of the details of the retiree’s eligibility (including CRDP eligibility) and sends it to DFAS.  At that point, DFAS updates the retiree’s pay profile and begins paying CRDP.  If any back pay of CRDP is owed, they will pay that usually within sixty days of the update.

 

Like I said a moment ago, I have see both of these work in the past.  Keep a close eye on your own status and seek the assistance of a retirement services officer if you need to change something.  As always, I do not recommend trying to do this yourself (increased irritation and delays normally result if you do).  The reason for this recommendation is this. Most retirees do not know what to do and make frantic phone calls to whomever they can reach.  This tends to cause further vexation.  RSOs are the key to success.  Use the key to unlock the door.

 

For some medically retired service members, there is a type of pay which makes up for this VA offset right now.  It is called Combat-Related Special Compensation (CRSC).  This is not an automatic payment and actually requires a special application.  I will describe CRSC and compare it to CRDP next week.

 

I hope this has helped you improve your understanding of Concurrent Retired and Disability Pay.  If not, drop a comment below or send your question to me via email at dj@rcretirement.com.  I will answer you hopefully clarify any problem you may have.

 

Don’t forget to subscribe to my YouTube channel and podcast.  They are also valuable tools in retirement education.  I encourage you to spread the word about this site, the channel, and the podcast. Be sure to hit that Like button for videos on my YouTube channel (www.youtube.com/rcretirement), as well.  I also ask that you review the podcast in iTunes.  This will help improve the likelihood of others finding it and gaining the knowledge they need to improve their own situations.

 

If you have any topics you would like for me to cover in the future, you can also leave those in the comments section or send your suggestions to me by email.  You can also find lots of useful information in the Resources section of my site.

 

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

 

D.J.

 

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


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.”


“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


Beware the IDES of Medical Boards…?

This week we’re going to talk about a very confusing topic.  For this reason, I’m going to break this into several pieces so it’s – hopefully – easier to understand.  I’m going to talk about the Integrated Disability Evaluation System or, at least as we call it in the Army, IDES (pronounced eye-dez).

By the way, don’t be afraid of the title of this article.  I chose that name simply as a play on “Beware the ides of March” from Richard Shakespeare’s Julius Caesar.  You shouldn’t be afraid of IDES and medical boards.  You should understand it and know how to use it to benefit you.  I hope to help you do this.

I will confess to a bit of insider knowledge on a lot of what I’m about to mention because I’m currently going through IDES myself.  Anyway, IDES is the series of medical boards you go through when you have medical problems which just won’t heal (like for more than twelve months).  Of course, the military would like for you to recover and continue to be an asset.  If this just isn’t going to happen, these medical boards may be the best option for you.  Don’t be afraid of them.  Even though separation and / or retirement is a possibility, there is still the chance of being determined to be fit for duty and continuing service.  If this continued service is not what happens for you, there are other ways to continue service if you choose to do so.

Let’s describe what happens when you start the down the path of the Integrated Disability Evaluation System.  First of all, integrated what?  Very simple.  IDES is a joint evaluation by both your branch of service and the Department of Veterans Affairs (VA).  This means you walk away with disability ratings from both agencies when you are finished.  These ratings are independent of each other; by that I mean each agency has its own standards for determining a rating.

As an example of what I mean by independent standards, your branch of service is concerned about the medical issues which inhibit you from performing your military duties and whether or not the injuries were caused by your military service.  Let’s say you’re an infantryman who has back issues which make it very painful for you to wear a rucksack and conduct a road march.  This would be quite a problem for an infantryman but might not be as important if you’re an office worker.  The VA would rate your disability either way but your branch of service (BOS) will only look at whether or not you can still do your job (including fitness tests and height / weight standards, of course).  The ratings from these two agencies can vary considerably as a result.  Just a while ago, in fact, I had one person talking to me who had a forty percent rating from the Army but a ninety percent rating from the VA.

Treatment and Referral
Anyway, you have at this point suffered through your medical issues and finally informed your BOS of them.  The BOS has conducted what is called a fit-for-duty board and determined that you are unfit for continued service.  You will receive at this point a letter called a Medical Retention Decision Point (MRDP) memo.  This letter will inform you of your status and give you three options.  Those options are:

  1. Separation from the military.
  2. Retirement or transfer to the Retired Reserve (if eligible).
  3. Requesting evaluation by IDES.

You will then have a set amount of time to make a choice from the options shown above.

 

But, DJ, what is the best choice for me?

This is something only you can determine.  Naturally, you can seek advice from retirement services officers and other professionals but you will ultimate have to be the one to decide.  In my experience, many service members have benefitted from going through IDES. There have been just as many whose injuries were not duty-related (not caused by military service) and would not benefit from IDES at all.

Claim Development

Now you have chosen to dive into IDES.  You should request this through your chain of command and begin to prepare by requesting all of your medical records.  When I say all, I do mean ALL of them and from all sources.  Since the VA is going to look at everything you give them, it is best to have it readily available.  Your BOS will want to see just those records which pertain to your service-connected injuries.  You may need to hand carry your records to your first meeting with your case manager.

Everyone is assigned a case manager called a Physical Evaluation Board Liaison Officer (PEBLO).  This person is the link between you, your commander, and the IDES. Your PEBLO will be responsible for the military side of things and will counsel you on expectations and benefits as you travel down this path.  You will also be assigned a Military Service Coordinator (MSC) who will be responsible for the VA side of things (more on him in a moment).

Note: I recommend verifying what you are told by a PEBLO with a retirement services officer.  In my experience, PEBLOs have given “hit-or-miss” advice to service members.  This is not to bash them.  Often they are active duty-centric and as a result of their lacking sufficient experience with reserve component members end up giving them mediocre or even incorrect advice.  MSCs can have this same problem (such as the one who spoke with me; it was obvious he was talking from an active duty standpoint and counsel which would be correct for someone on active duty but incorrect for a reservist).  Again, I’m not trying to flame these people.  I’m just telling you to seek additional information.

Your PEBLO will give you an initial counseling of what to expect from IDES and assist you in completing a list of all medical issues which limit or prevent you from completing your military duties.  You will then be referred to your Military Service Coordinator.  By the way, neither of these people are employees of the IDES.  They are employees of the Military Treatment Facility (in the case of the PEBLO) and the VA (for the MSC).

The MSC will talk to you about the VA examinations and will compile a list of ALL of the issues you may have (or wish to claim) which have been caused by or exacerbated by your service.  Your PEBLO and MSC will then coordinate all of the specialist examinations you will need for the next phase of IDES.

Medical Evaluation

You will now be evaluated by physicians and specialists to determine the extent of your injuries (this includes mental conditions, such as Post-Traumatic Stress Disorder, as well). You are expected to make all of your appointments without fail.  Your chain of command will be notified if you do not show up to an appointment.

Expect this phase to take a month or two to complete.  Don’t get frustrated by the timeline.  Also remember that results of these exams will be provided to both your BOS and to the VA for independent ratings evaluation.

Medical Evaluation Board

Your documentation and exam results will now be reviewed by at least two physicians who will determine if you are fit to return to duty or if you do not meet medical retention standards.  If you do not, you will be referred to the next stage, the Physical Evaluation Board.

The Informal Physical Evaluation Board

This panel is made up of a three-member board of officers and civilians (often with military experience) and a civilian physician. PEBs involving reservists will have a reserve component member on the board.  The PEB will develop written justification supporting each injury you have sustained as far as whether it is preventing you from performing your military duties and whether it was sustained in a combat zone (which is important in a variety of ways).  If your conditions existed prior to your military service, they will also determine whether it was exacerbated (made worse) by your service.  They will decide whether the condition is permanent or temporary.  Lastly, they will determine whether a disability rating is warranted for that injury.

Remember that IDES is a performance-based review.  It is concerned with your ability to do your job and not – as is so often said by barracks lawyers – whether you are deployable or not (though that could be a factor for some specialties like infantry).

The Combined Disability Rating

At the end of this evaluation, the PEB will determine your combined disability rating.  What is this, you may ask?  It is the total amount of disability based on your injuries.  This is not simply adding up your ratings, though.  For example, if you have three ratings, 50%, another 50%, and 30%, you do not have a combined rating of 130 percent.  How does a combined rating work, then?  Look at this (and this description applies to both the DOD and the VA).

First, assume you originally had a 100% capable body. Now take your highest rating (in this case, either of the 50% ratings) and subtract it from the 100% capable body.  You now have 50% of a “good body” left.  Now take the next rating (50% again, in this case) and apply it to what is left over.  Fifty percent of a 50% capable body is 25 percent.  This leaves a 25% capable body remaining.  We now apply the lowest rating (30%) to the 25% capable body. Thirty percent of 25% is 7.5 percent.  This is subtracted from the remaining 25% and leaves us with 17.5% of a capable body left or, to put it more simply, an 82.5% disability rating.  This rating is then rounded to the nearest ten percent (in this case, 80%) and gives us our final disability rating.

If that doesn’t make sense to you at first, try rereading that last paragraph.  I will also include a visual description of this in the Resources section of this article.  It usually helps people understand the math a little better.

Transition Phase

You now have a final combined disability rating.  If that rating is less than 30% and you have less than twenty qualifying years of service (remember we’re just talking about reservists here) then you will be offered a severance package (two months of base pay times your years of equivalent active duty service (retirement points divided by 360)) and separated from service.  If you have a 30% rating or higher, you will be medically retired and begin receiving retired pay and benefits immediately.

Remember last week when I said not to be afraid of medical disqualification if you have at least fifteen qualifying years of service?  This is one of the time in which this fact becomes very important.  If you have a rating of less than 30% and have at least fifteen qualifying years, you should not accept the severance when it is offered.  You should refuse it and request transfer to the Retired Reserve.  Your branch of service will be notified of your disqualification and years of service and will then issue you an early notice of eligibility (NOE) for retired pay (which has the same effect as if you had twenty years of service and received a twenty-year letter).  Often, we call this early NOE a fifteen-year letter (even if you have sixteen or even nineteen years of service).  The fifteen-year letter will prove your eligibility for retired pay and benefits at age sixty (or earlier if you have qualifying active duty service).  If you take the severance pay (and I’ll go deeper into this topic in another article) then you lose all of the benefits you have earned.  If you have medical issues, please either get fixed or go through IDES and retire.  It’s the best thing over continuing to hurt yourself through the ardors of military service.

If you disagree with the findings of the MEB or PEB, you do have the right to appeal.  Don’t think you are without options.  There is an entire section of military lawyers who specialize in assisting soldiers going through IDES.  Use them if you think you need them.

So how long does all of this actually take?  The goal for reservists is 305 days; the goal for active duty soldiers is 295 days.  Every case is different though so this can be longer or shorter based on your circumstances.

There is one more option available to you.  If you wish to only be evaluated by the military (and not by the VA), you can choose to go through the Legacy Disability Evaluation System or LDES (pronounced El-Dez).  This can be a much shorter evaluation but it can also reduce the total benefits for which you may be eligible.  Keep that in mind as you make your decision.

I have greatly simplified things in this article (and it’s still very long).  I will go into other factors as this series progresses.

If you think this information is useful, please share it with others.  I also would be interested in your comments (good and bad) and questions.  The more I hear from you, the better I can make these articles and other content.

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

D.J.

References:

Related YouTube Episodes:
The Basics of Reserve Retirement
Help, I Need My Records. Where is My DD 214?
Should I Take Drill Pay or VA Compensation?
How to Read an Army National Guard Retirement Points Statement
How to Read an Army Reserve Points Statement
How to Read an Air Force Reserve / Air National Guard Points Statement
How to Read a Navy Reserve Points Statement
How to Read a Marine Corps Reserve Points Statement
How to Read a Coast Guard Reserve Points Statement
Final Pay vs High-3
I’m Medically Unfit for Retention. Now What?

Related Podcast Episodes:
Help, I Need My Records. Where is My DD 214?
Should I Take Drill Pay or VA Compensation?
How to Read an Army National Guard Retirement Points Statement
How to Read an Army Reserve Points Statement
How to Read an Air Force Reserve / Air National Guard Points Statement
How to Read a Navy Reserve Points Statement
How to Read a Marine Corps Reserve Points Statement
How to Read a Coast Guard Reserve Points Statement
Final Pay vs High-3
I’m Medically Unfit for Retention. Now What?

Related Articles:
Help, I Need My Records. Where is My DD 214?
Should I Take Drill Pay or VA Compensation?
How to Read an Army National Guard Retirement Points Statement
How to Read an Army Reserve Points Statement
How to Read an Air Force Reserve / Air National Guard Points Statement
How to Read a Navy Reserve Points Statement
How to Read a Marine Corps Reserve Points Statement
How to Read a Coast Guard Reserve Points Statement
I’m Medically Unfit for Retention. Now What?


I’m Medically Unfit for Retention. Now What?

So, you’re finally to the point that you can’t hide your medical problems from your unit anymore (yes, people actually do this, sad to say).  A fit for duty board has reviewed your issues and has determined that you’re unfit for continued service in the military.  “Great,” you say. “I don’t have twenty years yet.  I’ve just lost all of the retirement benefits I’ve been trying to earn.”

Am I right?  Is this what’s going through your mind?  Well, there is still hope.  Do you have at least fifteen years of qualifying service yet?  If the answer is yes then you haven’t lost anything.  Here’s how things actually work.

As I’ve already implied, there is a vesting point (a point at which you have earned something through your service which cannot be taken away) before you reach the twenty-year mark.  If you have at least fifteen “good years” by the time you are found to be unfit for continued service and awaiting discharge, you can receive an early notice of eligibility for retired pay (in the National Guard, we call this a “fifteen-year letter”) and still receive retirement benefits at age sixty (or earlier if you have qualifying active duty time).

This fact has come as quite a surprise to a great many reservists who thought they had lost everything.  For example, just two weeks ago, I was giving a class to a group of Army Reserve soldiers and mentioned this little tidbit of information.  I noticed a great deal of increased electricity in the room and took a moment to scan the audience.  I then asked if this applied to anyone in the room (of course, I said they didn’t have to acknowledge me if it did).  No one made it plainly obvious by raising their hands, but I saw several heads nodding.  That was enough, though, to get several of them to ask additional questions which is exactly what I wanted.

One of them asked, “Why is it called a fifteen-year letter?  I have seventeen years of service.”  The answer, simply put, is it’s just a term we use based on the fact the service member has at least fifteen qualifying years, the minimum needed to get this notice of eligibility published early.

“How is pay calculated if you get one of these letters?” another inquired.  “Is pay prorated as if you did complete twenty years?”  No, I replied, it is not prorated but it is based on the total number of retirement points you have earned at the time you are discharged.  Other than the obviously lower number of points used to calculate pay, though, most of the other retirement benefits are exactly the same as if you had completed twenty years.  The only exception would be for concurrent disability and retirement pay (or CRDP, I’ll cover that in a later article in this series on medical retirements) for which the member would not qualify.

“Do the medical problems have to be in the line of duty?” asked someone else.  No, they do not.  You could get injured in while coming back from the grocery store or working around the house.  As long as the medical problem is not due to negligence or misconduct (such as drunk driving), it does not matter what caused it.  The primary factors are medical disqualification and fifteen years of qualifying service (remember you need fifty points per year for that time to count for retirement purposes).

After a few other questions which I don’t recall, it was obvious this fact came as quite a relief to these selected soldiers.  I asked how many of them were concerned about losing their retirements.  At this point, several people in the room raised their hands … even some who had not nodded their heads earlier.  Since such a worry is common in the National Guard, I was not surprised to see it was present in the USAR, as well.

So, what does all of this mean to you if you’re having medical issues.  It means, dear reader, if you have at least fifteen good years and want to travel this path then stop trying to push through the pain and present your medical problems to your unit.  They will send your medical documents through channels and, at some point, your records will be reviewed by a fit for duty board (you may be asked to go to your primary physician or a military doctor during this review).

If the board determines you no longer meet the medical retention standards then you will be recommended for discharge.  At this point, your service will generate the fifteen-year notice of eligibility.  When you receive this letter, remember to make a reserve component survivor benefit election (just as if you had received a twenty-year letter).  You will have ninety days from the time you receive the letter to make this choice.  Be sure to read my other articles on the survivor benefit plan to learn more about how SBP works.

Be sure to request transfer to the retired reserve and not to be completely separated from the military.  Your branch of service should know to do this but some (like the Army Reserve) will only do this if you request it (otherwise they’ll discharge you completely from service).  Once you have your transfer orders, you will be good to go until retirement age.

Has this helped you to better understand the options available to you?  I hope so.  If not, please be sure to comment below or send me an email with your questions.  Of course, comments are welcome even if you do not have questions.

If you think this information would be useful to someone you know then please be sure to share this article with that person.  Let’s get this into everyone’s head so they can make informed decisions.  As the cliché says, knowledge is power.

Thanks for being part of this audience today and, of course, thank you for your service.

D.J.

References:
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:
YouTube Episode 0003 – The Basics of Reserve Retirement
YouTube Episode 0004 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
YouTube Episode 0005 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
YouTube Episode 0006 – The Basics of the Survivor Benefit Plan (SBP)
YouTube Episode 0009 – So, What is This Reduced Retirement Age Thing Anyway?
YouTube Episode 0014 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Podcast Episodes:
Podcast Episode 0002 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
Podcast Episode 0003 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
Podcast Episode 0004 – The Basics of the Survivor Benefit Plan (SBP)
Podcast Episode 0007 – So, What is This Reduced Retirement Age Thing Anyway?
Podcast Episode 0012 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Articles:
The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
When Do I Make an Election for the Reserve Component Survivor Benefit Plan?
How Much Will the RCSBP Pay to My Beneficiaries and What Will It Cost Me?
Should I Buy a Life Insurance Policy Instead of Choosing the Reserve Component Survivor Benefit Plan?
What Are the Advantages and Disadvantages of the Reserve Component Survivor Benefit Plan?
What Are the Coverage Options for the Reserve Component Survivor Benefit Plan?
Who Can Be Beneficiaries of the Reserve Component Survivor Benefit Plan?
How Do I Enroll in the Reserve Component Survivor Benefit Plan?
The Basics of the Survivor Benefit Plan
How Do I Enroll in the Survivor Benefit Plan?
Should I Pay for SBP or Buy a Life Insurance Policy?
Calculating Retired Pay Under the Current (Legacy) Retirement Plan
The Notice of Eligibility for Retired Pay (Twenty-Year Letter)


What Is the DIEMS / DIEUS Date?

This week we’re going to cover what is probably one of the simplest topics on my list: the DIEMS date (or DIEUS, if you’re Air Force). The DIEMS date – or date of initial entry into military service (date of initial entry into uniformed service, if you’re Air Force) – is the date you first acquired any type of military status.  There are many different types of military status.  It can be a contracted cadet in Senior ROTC (sorry all of you high school folks in JROTC), a member of the delayed entry program, a cadet at a military academy, or a member of a reserve component, to name just a few.

 

The most important factor determined by the DIEMS date (I know it’s redundant to call it that but it’s easier to say it this way in conversation) is the particular pay plan under which one falls for retirement purposes.  If you recall last week’s topic, Final Pay versus High-3 Pay, you already know that when you joined the military determines how your retired pay is calculated. The DIEMS date is what determines if you are in the final pay or high-3 category (before 8 September 1980 for final pay, high-3 for everyone on or after that date).

 

There are a lot of dates used for a variety of purposes in the military.  The DIEMS date is one of the few that can never change (unlike a Pay Entry Base Date or a Basic Active Service Date…. Don’t worry if you don’t know what those mean).  PEBDs and BASDs can change often throughout a career, but a DIEMS will always be that date on which you first gained a military status. It will not change (unless it is incorrect in your records).

 

This is probably the shortest article I’ve written since I started this blog.  Believe it or not, that is all I have for this week.

 

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

 

D.J.

Related YouTube Videos
Final Pay versus High-3

Related Podcast Episodes
Final Pay versus High-3


My Story of 11 September 2001

I just posted this comment on The Survival Podcast.  I thought you would like to read it, too.

**********

I’m a bit behind in listening to the podcast so I’m a little late in posting this reply.  Here is what I was doing at the time the planes hit the World Trade Center.  While it’s just the minor efforts of an office worker (more direct action came later), it was significant for me.

I was an Army enlisted guy working at a joint operations unit at an air base in Georgia.  I had just finished my morning run, showered, and had put on my usual work uniform (at the time, it was the class B uniform).  I was walking through the little cubicle farm when I saw two Air Force officers hanging and chatting around the television we had in the center of our area.  They didn’t seem tense at the time, just interested in what was happening.

Out of curiosity, I strolled over to them and listened in on their conversation while glancing occasionally at the TV.  The officers were talking as if it had been an accident so there wasn’t much concern.  Only minutes later, we saw the second plane hit.  We all were startled by this, obviously.  We all realized the impact of this without a word passing between us.  In fact, I had not said a word at this point.

Still silent, I sighed and walked away from the television as the officers remained fixed to its screen.  I walked over to the entrance to our emergency operations center (EOC).  All of the computer work stations s had been disassembled for maintenance the day before and the components were still piled on the floor (the computers were still intact, but they were not connected to the other peripheries).  I knew we were going to need those computers very soon.  The EOC was going to be activated.

*****
Pardon me.  I had to step away from the computer for a moment.  I had lit a cigar (yes, at eight thirty in the morning) as a way to try settling myself down in order to write this narrative.  It only partially helped.  Memories of the day and events afterward (the faces of friends I lost later among other things) came flooding back and I broke out into major sweats and nausea.  I had to put out the cigar, step away, and sit in front of a fan for a while.  Eventually, I had to pray to the porcelain god.  I’ll continue now.
*****

Still clutching my gym bag, I went back to the shower room and changed back into my sweaty gym clothes.  They would be more appropriate for the work I was about to do.  I then returned to the EOC, turned on one of its televisions (it was already on a news channel; I think it was CNN. People were jumping from the windows of the Trade Center at the time), and began reassembling workstations.

The Pentagon was struck as I worked.  A thought flashed in my mind but did not yet have enough substance to really stick.  I had friends working there and couldn’t really think straight at the time.  I wondered if they were okay.

I had finished about half of the stations when I had to stop and stare fixedly at the TV.  The first tower had started to collapse.  I remember standing in the middle of the room, frozen stiff, as I watched it fall.  “This is a Clancy novel,” I thought to myself, remembering the events from ‘Debt of Honor’ which I had read years ago.  “Can this really be happening?”  Only minutes later, reports of the fourth plane crashing in Pennsylvania came onscreen.  I recovered from my paralysis, hung my head, and continued working.

I  was almost through with one workstation and had two stations remaining when my boss, an Army lieutenant colonel, and his non-commissioned officer in charge, an Army master sergeant, came into the EOC.  We all watched quietly as the second tower fell.  After we caught our breaths, the colonel said there was some classified message traffic which needed to be picked up and asked if I would drive to Atlanta to receive it (my security clearance was high enough to do so at the time).  I recall glancing at my unfinished task and saying I would do it.  The sergeant said he would finish reassembling the computers for me.  I nodded and left the EOC.

I grabbed my bag from my desk and changed one more time.  I picked up the key to our government car and stepped outside.  The entire base had changed in only two hours.  The base had been quite lax during the two years I had worked there.  You could almost say it was a civilian complex.  There had been civilian security at the gates – more of a formality, really – and everything had been laid back.  As I exited the building into the morning sunlight, I saw Air Force security police (SP) patrolling the base’s roads in HMWWVs with light machine guns mounted on them.  The main gate was now manned by the SPs, as well.  In a moment of dark humor, I thought, “The Air Force has remembered that it is part of the military again.”

I got into the car and drove away.  Of course, I had the radio tuned to a news station as I traveled.  I had been going for about ten minutes when the station gave an update on the day’s event and then, contrary to its usual format, began to play a song.  This song, which I had heard before, but in which I had never placed a great deal of significance, was ‘One Voice’ by Billy Gilman, a child country singer.  I think he was about twelve at the time.  Listening to the boy’s voice I as I drove, I finally felt the crushing weight of the day so far.  My eyes welled up and tears began to flow.  I don’t even remember the rest of the drive to my destination.

The remainder of the day was a blur.  I cannot recall much more than picking up the message traffic and eventually making my way back to the EOC.  I don’t think I even stopped for lunch.  Being Atlanta, the return trip took a significant amount of time.  The workday would actually end minutes after I delivered the messages to my boss.  I returned to my residence (at the time, a rented bedroom a few miles away) in a daze.  After firing off a quick email to my friend at the Pentagon (he turned out to be fine but I did learn his father had spent hours digging through rubble looking for his wife…who also turned out to be unharmed), I spent the rest of the evening staring at my television without really comprehending what I saw and heard until much later.

The next day as I entered the front gate on the way back to work, I remember being met by half a dozen SPs and seeing a machine gun nest about twenty meters from the gate.  The camouflage netting obscured what I knew was behind it.  I was sure there was an alert SP behind an M-60 or M-249 with his sights centered on my face.  Obviously, all of my movements were slow and deliberate so as not to give him a reason to pull the trigger.

That was my day.  Two weeks later, I was transferred to mechanized infantry battalion and eventually to my original unit, an armor battalion.  We mobilized in 2004 and went to Iraq for a year.  I then volunteered for another immediate deployment with a long-range surveillance company.  Memories from those trips overseas will remain with me forever.  I did nothing truly significant myself, but I know several great men who did…some of whom never returned.  It was a privilege to serve with them and, on August 15th of every year (the day four of them died), I lift a glass in their honor.

To the TSP community, I hope there is some meaning which you can take form this tale which will be of some small benefit to you.  Thank you, Jack, for this opportunity to tell this simple story.

DJ


Should I Pay for SBP or Buy a Life Insurance Policy?

I run into a lot of people who balk at the price of the Survivor Benefit Plan (and the reserve component version, as well).  They typically respond with a gruff “I don’t want to pay that” statement and then claim they’ll just buy a life insurance policy instead.

 

Some people also say they don’t want their pay “reduced” in order to cover their spouse.  I have a counter to that.  When you receive your leave and earnings statement and see a deduction for Servicemembers Group Life Insurance or an allotment for a car payment, is your pay being reduced or are you paying for a product or service?  The answer, naturally, is you’re paying for a service / product.

 

Sure, the reserve component survivor benefit plan can equal as much as 3.5% of retired pay and its active component version can be as high as 6.5% (reservists pay both premiums when they receive retired pay. The rules are slightly different for active duty retirees).  Ten percent of your money coming out of your monthly payment can seem like a lot and life insurance can be a tempting alternative.  Is it the best idea, though?

 

I have found it best to compare life insurance to the SBP and see how things pan out.  I am going to do this for you in this article.  For this comparison, I am going to use the example of a master sergeant (or pay grade E-8, for those of you who are not Army) who has 5,000 retirement points.

 

This individual would have, roughly, a $2,000 per month retirement payment.  His SBP premium for a spouse (who is three years younger than he is) would be around $200.  That sounds like a lot, yes, but let’s take a closer look at the numbers.  I am including a copy of my calculations in the resources section so you can follow along, if you like.

 

Let’s assume this person has a $250,000 life insurance policy and dies this year at the age of fifty-four.  For a fair comparison, we’ll also assume the widow only draws from the payout the same amount of money she would get in survivor benefits (she would likely need more to sustain herself).  If the widow were to take from that policy only the amount she would receive from the SBP ($1,100 per month which is 55% of the service member’s retirement), she would run out of money at the age of seventy-one.  It is possible to outlive a life insurance policy but you cannot outlive the survivor benefit plan.

 

The actuaries at the Department of Defense (read bean-counters) estimate the widow would live until the age of eighty-five.  This means she would have fourteen years without any money from the life insurance policy (we won’t count other streams of income).  If the husband’s intent had been to provide enough money for her to live at least at a subsistence level (again without considering other income), he has fallen short.  My calculator estimates he would need over $550,000 in life insurance in order to allow her to survive until eighty-five.  If he wanted her to have twice as much money each month ($2,200), he would need over $1.1 million.

 

This is a lot of money no matter who you ask.  Now let’s take the cost of life insurance into account.  Not only that, let’s take the husband’s age into account.  A fifty-seven year old man who is seeking $550,000 in life insurance is going to pay a hefty premium for that much coverage even if he is in good health and doesn’t smoke.  Now imagine what it could be if he wanted twice that much insurance.

 

I had a man who was wanting to do just this.  I told him he would face a much higher premium than the SBP premium for equivalent life insurance.  He decided to check anyway (and I applaud him for it).  He wanted $800,000 in coverage and went to one of many life insurances websites for a quote.  The best offer he was able to get as a premium was $788 per month.  The SBP amount was less than half of that.  He decided to do what I suggested which was in that case to keep the amount of life insurance he currently had and take the SBP coverage.  He chose to do just that.

 

My suggestion to that person is exactly what I typically recommend to people who bring up the life insurance option.  Supplement the SBP, I say, but don’t refuse it.  Most people accept my advice, thankfully.

 

Now let’s talk about a few other items of interest regarding the survivor benefit plan.  First, the premiums you pay only come out of your retired pay.  You would pay for a life insurance policy as soon as you agree to take out the policy whether you’re receiving retirement or not.  Next, the premiums are not taxed.  They come out before taxes on your pay are computed (try that with a life insurance policy).  Lastly, the survivor annuity is indexed for inflation every year; a life insurance policy stays the same no matter how much time passes.

 

That’s enough of my ranting for one day.  I hope this article has provided some information worthy of your consideration.  If you have any questions or comments, please post them below.  I always like knowing what others are thinking.

 

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

 

D.J.

 

References:
Retired Pay Estimate with Life Insurance Comparison