Can You Receive VA Disability and Military Retirement Pay at the Same Time?
Wondering if it’s possible to receive VA disability and military retirement pay without sacrificing one for the other? The answer is yes, it is possible, but only under certain conditions.
Retired veterans who have a disability rating of 50% or higher, or qualify for Combat Related Special Compensation (CRSC), are eligible to receive both benefits in full.
Veterans who have a disability rating lower than 50% will have their retirement pay reduced by the amount of their VA compensation, dollar for dollar, unless they qualify for CRSC.
We think this is an important topic that doesn’t get enough attention. We’ve brought together a bunch of resources here to help veterans beat the red tape. So read on to learn how VA disability compensation and military retirement pay work together, and how you can get the full benefits you earned when you signed up to serve.
Covered in this article:
- What is VA Disability Compensation?
- What is Military Retirement Pay?
- How to Combine VA Disability Compensation and Military Retirement Pay
- CRDP vs CRSC
- Appealing for a Higher Disability Rating
- Get Professional Help With Your VA Claim
Skip to the section on “How to Combine VA Disability Compensation and Military Retirement Pay” if you think you’ve already got the basics covered.
What is VA Disability Compensation?
To be eligible for VA disability compensation, you must have a service-connected disability. If you were injured in an IED explosion in Iraq, for example, you would be eligible for this benefit. If you had asthma before you entered the Army and it got worse due to burn pit exposure, you would be eligible for benefits. If you got in a car crash after you came home, you would not be eligible. The amount of compensation you receive is based on the severity of your disability, and it can range from a few hundred dollars to over $3,000 per month.
To get started, you will need to file a claim with the VA. You can do this yourself or you can work with a Veterans Service Organization to help you with the claim process. Once your claim is filed, the VA will review your medical records and any other evidence you include and make a decision. See our Getting Started page for tips on filing your initial claim and how the process works.
If you’re approved for VA disability compensation, you’ll begin receiving benefits plus back pay for the time you waited for the VA to make a decision (not going back to the time you were injured). VA disability compensation is a tax-free benefit. If your claim is not initially approved, or you receive a rating that seems too low, you definitely have options for appealing the decision to a higher authority. We recommend working with an experienced VA-accredited claims agent to gather additional evidence and file a successful appeal.
What is Military Retirement Pay?
VA disability and retirement are handled by separate departments of the government. Here’s a quick rundown of how military retirement pay works. These days, the U.S. military has two main retirement systems:
- The new Blended Retirement System (BRS)
- The legacy High-3 system
Which plan you fall under depends on when you joined the military and whether you chose to opt-in to the BRS.
The Blended Retirement System went into effect on January 1, 2018. It includes:
- Matching Thrift Savings Plan contributions
- Mid-career retention bonuses
- A monthly annuity for life after 20 years of service. The annuity is based on a calculation of 2% per year served. The legacy retirement annuity is based on 2.5% per year served.
Service members in the legacy High-3 system began their service by December 31, 2017. You’ll also hear it called High-36 or “military retired pay”.
- Veterans who served 20 years or more qualify for the full pension.
- Your retirement benefit is determined by your years of service. It’s calculated at 2.5% times your highest 36 months of basic pay.
- Thrift Savings Plan contributions are not matched by the government.
Military retirement pay is considered taxable income in most cases. Retirees can get both Social Security benefits and their retirement pay. However, most veterans who are not seriously disabled will have to choose between retirement pay and VA disability compensation. The latter benefit usually pays more.
We turn now to how VA disability compensation and retirement pay work together.
How to Combine VA Disability Compensation and Military Retirement Pay
Concurrent Retirement and Disability Pay (CRDP)
A veteran with a disability rated at 50% or higher will receive their full military retirement pay without any offsets. In the VA world, this is known as Concurrent Retirement and Disability Pay, or CRDP. A veteran with a disability rated at lower than 50%, on the other hand, will have their pension reduced by the amount of their VA disability compensation, dollar for dollar.
Believe it or not, CRDP didn’t even exist prior to 2004. Back then veterans had to choose between VA compensation and retirement pay. And it took 10 years for CRDP to be phased in – that is, for veterans that saw their retirement pay reduced to receive compensation.
Veterans advocacy groups have long argued that retired and disabled veterans should get all the money they’re owed, and not have to choose between one or the other. And while we are cautiously optimistic that fixing disability and retirement pay will be a priority for Congress, we’re not there yet.
For now, if you retired after 2014, you don’t need to apply for CRDP. If eligible you are automatically enrolled, and you won’t see your retirement pay reduced by your VA disability payments. Here are the full eligibility requirements:
- You are a regular retiree with a VA disability rating of 50% or higher.
- You are a reserve retiree with 20 years of service and a VA disability rating of 50% or higher and who has reached retirement age (60 in most cases).
- You are retired under Temporary Early Retirement Act (TERA) and have a VA disability rating of 50% or higher.
Concurrent Retirement and Disability Pay Back Pay
If your disability increased to 50% or higher and your retirement pay did not increase accordingly, you may be eligible for retroactive pay going back to 2004. Need help calculating your Concurrent Retirement and Disability Pay back pay? Get in touch with a VA-accredit claims agent at The Rep for Vets today.
Combat Related Special Compensation (CRSC)
The government created another program to help veterans with disabilities related to combat to receive more of their retirement pay. This is known as Combat Related Special Compensation, or CRSC. CRSC payments are tax-free. To qualify, you must meet the following requirements:
- You are entitled to military retirement pay
- You received a VA disability rating of 10% or higher
- Your retirement payment is currently being reduced by the amount of your VA disability pay
Now, it’s worth noting that the definition of “combat-related” is quite broad. If you got blown up by an IED in Iraq and received a Purple Heart, you absolutely qualify. But many veterans could qualify for CRSC if they were exposed to toxic chemicals or got badly injured in training.
Agent Orange-related illnesses are considered combat-related under the “instrumentality of war” clause of CRSC. In plain English, that means you were exposed to instruments of war, including chemical agents. Exposure to burn pits, radiation, and Gulf War disease could also qualify you for CRSC, if they caused you to develop a chronic illness.
Broadly speaking, any disability presumed to be service-connected (think Agent Orange in Vietnam or burn pits in Iraq and Afghanistan) could be considered combat-related for CRSC purposes.
Unfortunately, medical retirees with less than 20 years of service are not eligible for CRDP as of this writing.
So how do I apply for CRSC?
CRSC is not a VA benefit, so you don’t apply for it through the VA. Rather, you apply through your military service branch. The benefit is paid by your military branch of service.
If your CRSC claim was denied by your branch of service, you can gather new evidence and file an appeal. Contact The Rep For Vets and let us know about your situation. We may be able to help.
Note: There is a 6 year statute of limitations to apply for CRSC and get the full amount to which you are entitled, so act soon.
CRDP vs CRSC
CRDP restores the amount of your retirement pay that was reduced by your VA disability compensation to “full retirement pay”. As we touched on above, you don’t apply for CRDP. If you’re eligible, you will see an increase in your monthly payments. As with all government benefit programs, CRDP comes with caveats and fine print that we will save for another article on the topic.
CRSC works a little differently. You will continue to see your military retirement pay offset by the amount of your VA disability pay, but you will be reimbursed for the amount that is offset each month. Veterans who are eligible for CRSC get three checks a month: one from DFAS, one from the VA, and CRSC pay from their military branch of service. You apply to CRSC through your military branch of service, and that’s where the CRSC check will be written by.
You have the option to choose between the two programs. Look out for an open-season election letter from DFAS in December. That letter has information comparing the amounts you would receive from CRDP or CRSC and how it could impact your taxes. You can elect to switch programs during that window of time.
Appealing for a Higher Disability Rating
There are quite a few reasons why you might want to reopen your disability claim and seek a higher rating.
If your condition got worse since you last underwent a C&P exam, that’s good reason to seek a more accurate rating.
If you think your rating was too low to begin with, you can also appeal for a higher rating.
If you think the VA made a clear and unmistakable error (it happens more often than you might think), you have the right to file an appeal.
A rating that accurately reflects the severity of your disabilities could also qualify you for higher retirement pay, a win-win.
Remember, you can reopen a claim to increase your rating percentage at any time. This is especially important if you are no longer able to work as a result of service-connected disabilities.
Get Professional Help With Your VA Claim
Here at The Rep For Vets, our claims agents don’t like to see vets getting pushed around. We never forget what you’ve given to us. And we want to give something back by helping you get the benefits you deserve. Our claims agents promise to serve you as honorably as you have served our country.
The VA-accredited claims agents at the Rep for Vets have helped countless veterans across the United States navigate the claims process and get the benefits they deserve. We can help you understand how all this stuff works, and make sure you’re getting fairly compensated.
To schedule a free consultation, give us a call at 1-888-573-7838, or fill out this quick form to get started. We look forward to learning about your unique situation and helping out in any way we can.
Photo credit top: Ryan Johnson via the City of North Charleston on Flickr