Department of Defense Programs Addressing the Issue of Concurrent Receipt

The Department of Defense (DoD) is, and has been, making extra payments to retirees to overcome some or all the offset from retired pay associated with receipt of disability compensation from the Department of Veterans Affairs (VA). Retirees cannot receive benefits simultaneously under more than one of these three programs. The programs are:

1. Concurrent Disability Payment (CDP): The FY 2004 NDAA provides a 10-year phase-out of the offset to military retired pay due to receipt of VA disability compensation for members whose combined disability rating is 50% or greater. Members retired under disability provisions (10 U.S. Code chapter 61) must have 20 years of service.

• Effective January 1, 2004: Payment will be made to nearly 150,000 qualified retirees for January entitlements on February 2. Those who have significant complications in their accounts (such as former spouse divisions or retirement under chapter 61) may be delayed in payments until their account can be manually reviewed, but will be paid retroactively.
  
• No Application: Applications for CDP are neither required nor accepted. DFAS will determine CDP benefits automatically. Retirees who do not receive payment by April 1, 2004, but believe they qualify, should contact their Military Department or DFAS to determine the reason for non-payment
  
• Rates: CDP is part of retired pay and cannot exceed the amount that would be otherwise offset. During CY 2004, CDP will be paid to qualified retirees up to the following maximum amount based on the current monthly VA disability rating:
  
  

  100% (total) 90% 80% 70% 60% 50%

  $750 $500 $350 $250 $125 $100

2. Combat-Related Special Compensation (CRSC): The CRSC program pays added benefits to retirees who receive VA disability compensation for combat-related disabilities and have 20 years of service.

• Effective June 1, 2003: CRSC became effective May 31, 2003, with first benefits payable July 1 for the June entitlement. Initially, benefits were payable to members with a combined combat-related disability rating of 60% of more, or with a combined rating of 10% or more for combat-related injuries for which they were awarded a Purple Heart.
  
• Effective January 1, 2004: Eligibility was expanded January 1, 2004, to compensate qualified retirees at any combined percentage rating for combat-related disabilities compensated by the VA. Eligibility criteria was also relaxed with respect to the 20 year requirement to include any member otherwise qualified who is receiving Reserve retired pay (paid at age 60 based on points for Reserve participation with 20 “good’ years).
  
• Application Required: To receive CRSC benefits, retirees must apply with their Branch of Service on a DD Form 2860. The Service will determine which disabilities, if any, qualify as combat-related. DFAS will pay CRSC based on the current combined disability rating of combat-related disabilities as compensated for the current month by VA. Benefits before January 2004 are based on the VA compensation rate for a “veteran alone” and applicable to only those disabilities determined as combat-related.
  
• Information: Additional information is available at the following web sites.
  
  Army: http://www.crsc.army.mil/
  Navy & Marine Corps: http://www.hq.navy.mil/ncpb/CRSCB/combatrelated.htm
  Air Force: http://www.afpc.randolph.af.mil/disability/CRSC/CRSCnew.htm
  DoD: http://www.defenselink.mil/prhome/crsc.html

3. Special Compensation for Severely Disabled Retirees (SCSD): The SCSD program was repealed effective January 1, 2004, and replaced with more generous benefits under the CDP program described above. Members had to have 20 years of service for the computation of retired pay. Those retired under disability retirement provisions (i.e., chapter 61, title 10, United States Code) were excluded from eligibility.

• SCSD Repealed Effective January 1, 2004: No benefits are payable under SCSD for periods after December 31, 2003. SCSD became effective October 1, 1999 for qualified retirees with VA disabilities rated 70% or more within 4 years of retirement. The criteria were relaxed October 1, 2001, to include chapter 61 retirees so long as they had the required 20 years of service. Effective February 1, 2002, the criteria were again relaxed to include those with disabilities rated 60% or more within 4 years of retirement. 37,000 members were eventually compensated. Members not compensated who provide evidence of their qualifications may be retroactively compensated for any months in which they met the requirements of law.
  
• No Application: Applications for SCSD were neither required nor accepted. Qualified members were identified and paid by DFAS using data in DoD and VA system files.
  
• RATES - The rates applicable over various periods were as follows and based on the disability rating compensated by the VA for the month of entitlement:
  
  

  VA Rating 60% 70% 80% 90% 100% (total)

  Oct 1999 N/A $100 $100 $200 $300

  Feb 2002 $50 $100 $100 $200 $300

  Jan 2003 $50 $100 $125 $225 $325

  Program repealed in Jan. 2004

Combat-Related Special Compensation (CRSC) for Certain Combat-Disabled Uniformed Services Retirees

The Department of Defense is currently receiving and processing applications for the Combat-Related Special Compensation (CRSC) program. The CRSC program became effective May 31, 2003, for qualified retirees with combat-related disabilities. Payments are retroactive to June 1, 2003, for otherwise qualified members. The criteria of eligibility to receive CRSC payments have been expanded effective January 1, 2004, to include members with any percentage combat-related disability compensated by the VA. Information is available at the following DoD and Service web sites:

Army: http://www.crsc.army.mil/
Navy & Marine Corps: http://www.hq.navy.mil/ncpb/CRSCB/combatrelated.htm
Air Force: http://www.afpc.randolph.af.mil/disability/CRSC/CRSCnew.htm
DoD: http://www.defenselink.mil/prhome/crsc.html

Eligible Members are those retirees who have 20 years of service for retired pay computation (or 20 years of service creditable for reserve retirement at age 60) and who have disabilities that are the direct result of armed conflict, specially hazardous military duty, training exercises that simulate war, or caused by an instrumentality of war. Such disabilities must be compensated by the Department of Veterans Affairs and rated at least 10% disabling. For periods before January 1, 2004, members had to have disabilities for which they have been awarded the Purple Heart and are rated at least 10% disabled or who are rated at least 60% disabled as a direct result of armed conflict, specially hazardous duty, training exercises that simulate war, or caused by an instrumentality of war. Those who applied under the original program and found to have combat-related disabilities for which the combined rating was less than 60% do not have to reapply. Their records will be sent forward to DFAS to initiate payments.

Payment Amount: CRSC benefits are equal to the amount of VA disability compensation offset from retired pay based on those disabilities determined to be combat-related. For periods before January, 2004 payments were equal to the amount payable by VA to a “Veteran Alone” for those disabilities determined as combat-related. These amounts are reduced for retirees with retired pay in excess of the amount that would be paid solely for length of service retirement if they receive more than that amount as a result of a disability retirement (i.e., retired under chapter 61 of title 10, U.S. Code). Payments are limited to the amount of the retired pay reduction resulting from receipt of VA disability compensation for qualified disabilities. VA compensation amounts are not affected.

Tax Exempt: CRSC payments are tax exempt according to the Armed Forces Tax Council.

Application Required: Members must apply to their own branch of service using DD form 2860, Application for Combat-Related Special Compensation (CRSC). The updated form should be available in late February 2004 at: http://www.dod.mil/prhome/crsc.html. The old version will remain available until the revised version is released.

Service Determinations: Each Branch of Service must review the applications of their own retirees to determine which disabilities, if any, are combat-related. The Department of the Navy reviews applications for both the Navy and Marine Corps. Payments are made retroactive to June 1, 2003, for all approved applications, no matter when received, to the extent otherwise allowed in law, providing the applicant is otherwise qualified for the period of entitlement. Services may be contacted at the following toll-free numbers:

Army: 1-866-281-3254
Navy and USMC: 1-877-366-2772
USAF: 1-866-229-7074

Services are to presume that disabilities awarded VA disability compensation based on service-connected exposure to hazards, which are clearly combat-related, are combat-related for the purpose of CRSC. These include Agent Orange, Gulf War illnesses, Radiation Exposure, Mustard Gas and Lewisite. Post-Traumatic Stress Disorder (PTSD) will require combat-related documentation.

Retirees to be Informed: Retirees are to be notified by their Branch of Service of the outcome of their application, including, for those denied, the reason therefore. Retirees may reapply later if they are able to show they meet the program criteria or appeal the decision if they believe their disabilities were combat-related, but were denied compensation by their Service.