Does Disability Compensation Affect Retirement Pay?

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Does Disability Compensation Affect Retirement Pay?

When you apply for your VA disability benefits, there are so many other benefits that you may qualify for. But the VA may not often share how your disability benefits affect your other benefits.

Nearly 20 years ago, veterans couldn’t receive both retirement benefits and disability compensation simultaneously. Today, new changes to the law have allowed some veterans to receive the full scope of both benefits simultaneously. But it depends on a few factors.

Two Programs For Veterans

The new federal changes have led to two new programs for veterans: the Concurrent Retirement Disability Pay (CRDP) and the Combat-related Special Compensation (CRSC).

Even though it’s possible to qualify for both programs, the VA will only let you receive additional compensation from one of them. You must choose which payment you want to receive when applying for your benefits. The good news is that if your situation changes, later on, you can change your selection.

Combat-Related Benefits

To receive the full amount of their retirement benefits, veterans who also receive disability benefits must prove that their disabilities are 50% service-related or more. But veterans who became disabled during combat may be eligible for full retirement benefits.

You may be able to receive combat-related special compensation (CSRC), which is a monthly payment that covers the rest or the full amount of your retirement pay. You may be offered this compensation if your retirement pay has been reduced due to your disability compensation.

Eligibility For CRSC

To be eligible for CRSC, you have to meet the following criteria:

  • 20 years or more of active duty
  • Possession of a permanent medical retiree status
  • Listed on the Temporary Disability Retirement List
  • Reduced military retirement pay due to VA disability payments
  • Proof of a combat injury as a result of a Purple Heart, Gulf War, or hazardous service

In addition to meeting this criterion, you must also file within the statute of limitations. Veterans who are applying for CRSC have six years after the date of receiving their VA rating to receive their payment.

Concurrent Retirement And Disability Pay (CRDP)

With CRDP, you would be allowed to receive both retirement pay and disability compensation. But just like with CRSC, it would depend on your disability rating.

You must have a rating of 50% or higher to receive the full payment of your retirement benefits and your disability compensation. If you have a 40% or lower rating, you will not be eligible for CRDP. Instead, your retirement pay could be deducted from the amount of your disability benefits.

The Reason For The Deduction

When your disability ranking is 40% or lower, your retirement benefits will be offset based on the number of your disability benefits. The main reason is for you to receive tax-free payments from the VA. The tax-free portion of your benefits will give you greater spending power.

Speak To A Veterans Benefits Attorney Today

To learn more about how you can make your veteran’s benefits work for you, contact the Comerford Law Office online for your free case evaluation.

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