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1 1 (October 20, 2022)

handle is hein.crs/govejdz0001 and id is 1 raw text is: Congressional Research Service Naam Informing the legislative debate since 1914 Updated October 20, 2022 Defense Primer: Concurrent Receipt of Military Retirement and VA Disability Concurrent receipt refers to a veteran's simultaneous receipt of two types of monetary benefits: military retired pay from the Department of Defense (DOD) and disability compensation from the Department of Veterans Affairs (VA). Prior to 2004, existing laws and regulations stipulated that a military retiree could not receive bot payments concurrently. As a result, military retirees with disabilities recognized by VA would incur a retired pay offset (i.e., dollar-for-dollar reduction) by the amount of their VA compensation. The FY2003 and FY2004 National Defense Authorization Acts (NDAA) authorized, for the first time, two separate and distinct concurrent receipt benefits, Combat Related Special Compensation (CRSC), and Concurrent Retirement and Disability Payments (CRDP). An eligible retiree cannot receive both Concurrent Retirement and Disability Payments (CRDP) and Combat-Related Special Compensation (CRSC). To be eligible for concurrent receipt under these programs all recipients must be eligible for both (1) military retired pay and (2) VA disability compensation. An eligible retiree cannot receive both CRDP and CRSC. The retiree may choose whichever is most financially advantageous to him or her and may change benefit election during an annual open season. According to the DOD Actuary, in FY2021, approximately 42% of all military retirees collecting retired pay were either receiving CRDP or CRSC. Table I. Comparison of CRSC and CRDP CRSC CRDP Classification Special Military retired compensation pay Qualified Combat-linked Service-connected disabilities disabilities disabilities Federal taxation Nontaxable Taxable Claim process Apply to branch Automatic of service Source: Derived from Defense Finance and Accounting Service. Concurrent Retirement and Disability Payments (C RDP) CRDP was first authorized in the FY2004 NDAA and was phased in over a 10-year period between 2004-2013. CRDP is sometimes referred to as restored retired pay, as it exempts certain members from the offset of VA payments normally required under 38 U.S.C. §§5404 and 5405. Under this offset, a retiree is required to waive retired pay in the amount of VA disability compensation they are eligible to receive. As VA disability compensation is nontaxable, waiving retired pay generally provides a net financial benefit. CRDP authorizes military retirees with at least a 50% service-connected disability as rated by VA to receive full military retired pay and VA disability compensation without offset (see Figure 1). There are currently two groups of retirees who are not eligible for CRDP benefits. The first group is non-disability military retirees with service-connected disabilities (not combat-related) that have been rated by VA at 40% or less. The second group includes disability (Chapter 61) retirees with service- connected disabilities and fewer than 20 years of service (YOS). Figure I. CRDP Eligibility Flowchart CRDP Eligibility VA d$ bill of SOT or more? Source: CRS analysis of statute. Notes: Member refers to a retired member of the Armed Forces. Temporary Early Retirement Authority (TERA) retirees are those retired with less than 20 years of service due to force management requirements. Disability ratings are awarded in 10% increments. Combat Related Special Compensation CRSC is considered special compensation and not restored retired pay. Under CRSC, the retired pay offset still applies to receive VA disability compensation; however, CRSC reimburses the member for some, or all, of the offset. The amount of CRSC depends on the percentage of the disability that is combat related (CRSC rating) and may not exceed the reduction in retired pay. These factors make the calculation of CRSC more complex than CRDP, as every veteran's situation may be different. It may be easiest to think of the total CRSC benefit as three separate payments, (1) retired pay from DOD minus VA disability payment based on VA rating; (2) VA disability payment based on

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