How is it justified to deduct VA Comp from DFAS retirement pay?

2023-02-13T00:36:24-05:00

How is it justified to deduct VA Comp from DFAS retirement pay??

Response by SGM Mikel Dawson made Feb 13 at 2023 5:34 AM

2023-02-13T05:34:22-05:00

If you are rated less than 50% disability, they will deduct from Retirement, happened to me, that is the rules. 50% or higher, you get to keep them both. No one likes it, but that is the VA rules, unless it get changes, which I do not see it happening.

Response by LTC Kevin B. made Feb 13 at 2023 8:53 AM

2023-02-13T08:53:20-05:00

The primary reason that you have to give up retirement pay to receive the disability compensation is because Congress didn't want to come up with enough money to fully pay you for both. That's a cynical viewpoint, but it was the reality behind finally getting this up and running. In 2004, Congress finally agreed that concurrent receipt of retirement pay (for past service) and disability (for loss of future earnings) was the right thing to do, and they passed it into law. As they were writing the legislation, they ran the numbers to fully fund concurrent receipt, but the projected amount was too big. So, Congress drew the line at 50% as a means to keep the overall cost down. Anyone below 50% was hosed, and anyone 50% or above benefited by receiving both. Also, to help keep the cost down, they phased it in over 10 years.

Here are a couple of links to more information on the program:

https://crsreports.congress.gov/product/pdf/IF/IF10594/

Just a moment...

Response by MSG Private RallyPoint Member made Feb 13 at 2023 11:55 AM

2023-02-13T11:55:14-05:00

Let's hope some positive changes are coming. I think it would be a big win if the percentages were reduced to 30%.

Take a look at an article I posted:

https://www.rallypoint.com/shared-links/fixing-disability-and-retirement-pay-is-congress-next-big-vets-issue

Fixing disability and retirement pay is Congress’ next big vets issue | RallyPoint

Allowing disability pay to be added to a regular retirement only makes sense. Why should someone who is 40% and under be penalized with an offset to their pay while 50% and higher recipients receive both in full?

Response by Patricia Overmeyer made Feb 13 at 2023 3:26 PM

2023-02-13T15:26:11-05:00

TSgt (Anonymous): The rules regarding the VA CRDP/CRSC and military retirement pay follow the basic DOB (duplication of benefits) rules that are prevalent in both federal and state laws. These are commonly called double-dipping rules. At its basic form, DOB rules are designed so that federal monies (or state monies) are not paid out from different agencies for the same transaction/cost. These DOB rules have been around for close to 180 years and are designed to ensure that a person or entity is not receiving federal funding for the exact same service/goods, etc.
How this applies in the VA/DFAS area is as follows: When you apply for VA disability, that disability must be connected to your military service. (You don't get VA disability for injuries that resulted in disability from a car accident that you had while not on duty.) Thus, the funding for your disability comes from monies that are directed to the VA from the DoD budget. Your military retirement comes from the fact that you were in service for the required number of years and you were retired in good standing. The military retirement comes from monies that are directed to the DoD budget for retirement. Thus you have two different compensations coming from two different federal sources for your military service. The DoD may be one large agency, but it has different buckets where money is deposited for various things (i.e military forces pay for all branches is one bucket, Air Force fighter jets in a different bucket, Army tanks in a different bucket, etc.) Thus if you wanted VA disability pay (which is non-taxable as compared to military retirement which is taxable), then you had to sign a waiver of your military retirement pay to receive the amount of VA disability pay.
For a long time if you received more VA monies than DoD retirement, you did not receive retirement. Essentially, you received whatever was higher. Thus if you wanted VA disability pay (which is non-taxable as compared to military retirement which is taxable), then you had to sign a waiver of your military retirement pay to receive the amount of VA disability pay.
In 2004, per the NDAA, Congress passed the law which allowed military retirees to obtain both military retirement and VA disability pay, but only if the VA disability rating was 50% or higher. There was a period of time in which this was phased in to finally reach the 50% mark. In 2003, the CRSC program was started with the same allotment that if your disability rating from the VA was combat related and you were retired with 20 years or more, then you could receive CRSC and military retirement. If you receive one dollar from CRSC then you cannot receive any CRDP (and vice versa). Again the prohibition to receive CRSC and CRDP comes from the DOB rules.

Response by SGM Bill Frazer made Feb 14 at 2023 5:03 PM

2023-02-14T17:03:07-05:00

It is justified because the powers in charge said so- strict lines on double dipping and getting retirement and disability would be just that- don't like, but they haven't changed it since WWII

Response by LTC Private RallyPoint Member made Feb 16 at 2023 1:25 PM

2023-02-16T13:25:02-05:00

By law....unfortunately