JUST GOT APPROVED FOR CRDP - GOT QUESTIONS

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[associated with the post immediately preceding]

The six-year barring law.

There is a six-year barring law. The "six year barring law" is contained within 31 U.S. Code § 3702 - Authority to settle claims

https://www.law.cornell.edu/uscode/text/31/3702

Ron
 
[associated with the post immediately preceding]

The six-year barring law.

There is a six-year barring law. The "six year barring law" is contained within 31 U.S. Code § 3702 - Authority to settle claims

https://www.law.cornell.edu/uscode/text/31/3702

Ron


FINAL UPDATE FINAL UPDATE FINAL UPDATE

CRDP RETRO DISBURSEMENT IS SCHEDULED FOR JULY 02, 2018

DFAS notified me via email that there was an accounting change. MY EMAIL SAID:

"You are getting this notification because a change has been made to your Net Pay or to your Arrears of Pay Beneficiary Election. This change will be reflected in the new Daily RAS, which can be found on your myPay account.".......

So I went to MyPay, and sure enough - DFAS SENT ME A NEW, ONE-TIME Retiree Account Statement where at the very bottom of the RAS it says, "THIS STATEMENT REPRESENTS A CRDP CREDIT. THIS STATEMENT IS BEING ISSUED AS A RESULT OF A SPECIAL PAYMENT."

As far as I have been able to estimate, DFAS DID go back 72 months and they ARE going to retro pay me RETRO CRDP. The gross figure they came up with is just about (very close to) what I estimated my GROSS CRDP backpay to be.

(I will request a copy of their audit just to be sure - thanks Ron!)

This payment will be in a lump sum (I'm assuming so) as DFAS only sent me this one RAS and it has a lump sum total figure on it for those 72 months of back pay.

This total shows the total GROSS amount, the total Federal taxable amount, and the total net pay amount.

It appears when I divided the net and gross, I was NOT TAXED at 28% - I was taxed at 32.33%.

I'm not sure what they (DFAS) bases their withholding on as it appears the DFAS phone guy was wrong on the flat 28% Fed tax he said would be withheld.

So it looks like from the time the DFAS audit was assigned in mid-May to my notification of a pending payment - this time period took almost six weeks.

But on Monday, July 02, I should be looking at a healthy deposit of backpay in my bank account.

OH HAPPY DAY!!!!

I can finally pay off all remaining US debts and get ready to begin my time in Thailand and SE Asia on schedule and as planned - and with no more debt stress.

Man, it's been a looooong six years - so this is really a BIG relief! It will feel really good to put all of this stuff back behind my rear view mirror.

V/R,
nwlivewire
 
Congratulations!

I am interested in "I was NOT TAXED at 28% - I was taxed at 32.33%." Are you having state taxes collected by DFAS? I know you were residing in a state that does not have taxes on income, but possibly you had made arrangements for taxes to be collected for another state at one time.

This is from one of the DFAS pages: The Federal Supplemental Rate for withholding is 25 percent.

You will likely receive a healthy tax refund at the end of 2018.

Regards,
Ron
 
The RAS
Congratulations!

I am interested in "I was NOT TAXED at 28% - I was taxed at 32.33%." Are you having state taxes collected by DFAS? I know you were residing in a state that does not have taxes on income, but possibly you had made arrangements for taxes to be collected for another state at one time.

This is from one of the DFAS pages: The Federal Supplemental Rate for withholding is 25 percent.

You will likely receive a healthy tax refund at the end of 2018.

Regards,
Ron

The RAS that covers this CRDP backpay says at the bottom in ALL caps:

THIS STATEMENT REPRESENTS A CRDP CREDIT.

THIS STATEMENT IS BEING ISSUES AS A RESULT OF A SPECIAL PAYMENT.

**********

?????????? "SPECIAL PAYMENT" - an exception to the rule of 28% Fed tax withholding?????

**********

In the statement block entitled "PAY ITEM DESCRIPTION", this CRDP backpay money is registered by DFAS as a "MISCELLANEOUS CREDIT"

DFAS also places the entire amount as a "TAXABLE INCOME" amount (nothing unusual there - that's the CRDP standard).

The FEDERAL INCOME TAX WITHHOLDING amount is the ONLY tax that was taken from this gross amount because DFAS has my residency as Texas - a NO INCOME TAX state.


TOTAL GROSS: 65,248.70

FITW: 21,123.69

NET: 44,125.01

So 21,123.69 divided by 65,248.70 = 32.3741162% taxation rate

*** Just so you know because I am not a finance person, I have been claiming for these past years with DFAS a SINGLE and 5 for FEDERAL tax withholding on my W-4. This is because in the past (before I was just now fully CRDPed) my single and 0 status took out too much tax every month. My tax person and I figured out that in my case, that my going with a withholding of S/5, then this would allow me to break even on my annual FED tax obligation where I would not owe the FEDs and get back less than 100 bucks for an annual tax refund.

I will have to adjust my W-4 again after this year is up - now that I am being fully paid my CRDP - so I won't owe the FEDS at the end of the 2019 tax year.

But right now, I am still at S/5 with DFAS - which makes me wonder if I was taxed at THAT FED S/5 tax rate for this "MISCELLANEOUS CREDIT" lump sum payment.

I don't have an answer to this as I am not a finance guru - but just curious as to how they arrived at that tax withholding figure with the FEDS.

I just hope I didn't UNDERPAY - that's what I'm more concerned about with this lump sum payment.

V/R,

nwlivewire
 
25% Lump Sum Fed Tax Rate for withholding (Mil Pay)

6.2% social security + 1.45% medicare =7.65% total

25% + 7.65% = 32.65%

Note: CRDP is retired pay, restored

---
Ron
 
25% Lump Sum Fed Tax Rate for withholding (Mil Pay)

6.2% social security + 1.45% medicare =7.65% total

25% + 7.65% = 32.65%

Note: CRDP is retired pay, restored

---
Ron

HMMMMMMM....

I am already collecting SSDI (qualified for SSDI in 2010 - retro to 2007 - THEN finally PDRL retired in APR 2012). The FEDs currently take out my Medicare premium every month before I receive my SSDI.

So IF I am taxed SOCIAL SECURITY/MEDICARE for this when I am already in receipt of SSDI (through the Social Security system) - then does this means that the Social Security Administration will have to recalculate and increase my monthly SSDI payment as this CRDP is SSA/Medicare taxed under "earned income"????

V/R,
nwlivewire
 
Last edited:
I know little to nothing about SSDI. Receipt of CRDP is receiving retired pay.

CRDP is earned income and as such, is taxed.

Ron
 
Congratulations of getting your retirement straight. Six years was a long haul.
 
I have been serving for 20 years. I am havina Med board conducted. If I ended up with 75% as my retirement rating paid by the DOD and 100% VA rating can I do anything to receive both amounts fully with out losing some of my retired pay in order to equal just a normal 50% retirement pay?is there anyway to be eligible for full concurrent receipt of both your VA disability compensation and your retired pay, if you are a military retiree who meets all of the above eligibility requirements? Maybe being rated as unemployable? Thanks so much. Jade
 
I have been serving for 20 years. I am havina Med board conducted. If I ended up with 75% as my retirement rating paid by the DOD and 100% VA rating can I do anything to receive both amounts fully with out losing some of my retired pay in order to equal just a normal 50% retirement pay?is there anyway to be eligible for full concurrent receipt of both your VA disability compensation and your retired pay, if you are a military retiree who meets all of the above eligibility requirements? Maybe being rated as unemployable? Thanks so much. Jade
Welcome to the PEB Forum! :)

Indeed, @RonG is one of the PEBFORUM's resident experts about these types of military financial matters and hopefully he shall chime in with his sound insightful feedback soonest. Take care!

Thus, I quite often comment that "possessing well-informed knowledge is truly a powerful equalizer!"

Best Wishes!
 
I have been serving for 20 years. I am havina Med board conducted. If I ended up with 75% as my retirement rating paid by the DOD and 100% VA rating can I do anything to receive both amounts fully with out losing some of my retired pay in order to equal just a normal 50% retirement pay?is there anyway to be eligible for full concurrent receipt of both your VA disability compensation and your retired pay, if you are a military retiree who meets all of the above eligibility requirements? Maybe being rated as unemployable? Thanks so much. Jade
The first part of this reply was added after completion of the primary reply. You asked, "...can I do anything to receive both amounts fully with out losing some of my retired pay in order to equal just a normal 50% retirement pay? " Answer: No. The laws pertaining to concurrent receipt have certain restrictions. One of the restrictions is that CRDP does not restore the waived disability portion of retired pay. "Special Rules for Chapter 61 Disability Retirees: Members retired for disability under Chapter 61 of title 10 United States Code may be entitled to CRDP only if they have at least 20 years of service qualifying for regular or reserve retirement. Additionally, any disability retired pay that is in excess of retired pay to which that member would be otherwise entitled (i.e., for years of service) remains subject to offset and may not be restored under the CRDP program. "

If your "serving" is all active duty, then you would be eligible for CRDP (with a VA rating of >=50%) which allows concurrent receipt of retired pay and VA compensation. The amount you would receive from DFAS would not exceed the amount computed for the longevity portion of retirement. You would also receive VA compensation.

If you are a reserve member with 20 good years, and have met the age requirement for reserve retirement, the same would apply. If you are a reserve member with 20 good years but have not met the age requirement (~60) for receipt of retired pay, you would have to wait until you reach that age. VA compensation is also paid.

From DFAS:
Eligibility
You must be eligible for retired pay to qualify for CRDP. If you were placed on a disability retirement, but would be eligible for military retired pay in the absence of the disability, you may be entitled to receive CRDP.

Under these rules, you may be entitled to CRDP if…

  • you are a regular retiree with a VA disability rating of 50 percent or greater.
  • you are a reserve retiree with 20 qualifying years of service, who has a VA disability rating of 50 percent or greater and who has reached retirement age. (In most cases the retirement age for reservists is 60, but certain reserve retirees may be eligible before they turn 60. If you are a member of the Ready Reserve, your retirement age can be reduced below age 60 by three months for each 90 days of active service you have performed during a fiscal year.)
  • you are retired under Temporary Early Retirement Act (TERA) and have a VA disability rating of 50 percent or greater.
  • you are a disability retiree who earned entitlement to retired pay under any provision of law other than solely by disability, and you have a VA disability rating of 50 percent or greater. You might become eligible for CRDP at the time you would have become eligible for [receipt of] retired pay.
___

Combat Related Special Compensation (CRSC) might be an option. A collection of CRSC info is at Supplement to CRSC Information <---LINK
and is available for download by using the red button on the page. CRSC does not replace the disability portion of waived retired party

Ron
 
Thanks Ron. I am 20 yrs active duty. No CRSC can be collected. I read that if you were deemed unemployable by the VA you could collect full retirement even if it was more than 50% and CRDP. I have already been told I would be eligible for CRDP. I would be a CH 61 retiree. I know I will be at least 100% with the VA. Thanks
 
Thanks Ron. I am 20 yrs active duty. No CRSC can be collected. I read that if you were deemed unemployable by the VA you could collect full retirement even if it was more than 50% and CRDP. I have already been told I would be eligible for CRDP. I would be a CH 61 retiree. I know I will be at least 100% with the VA. Thanks


Hello,

1. You mentioned, "I read that if you were deemed unemployable by the VA you could collect full retirement even if it was more than 50% and CRDP"

Individual employment (IU) is paid by the VA and the amount paid is @ the 100% rate even if your VA rating is less than that.
For IU paid by the VA:
You must have either:
-- One disability that is rated at 60 percent or more
--Multiple disabilities, with one disability rated at 40 percent or higher, and a total rating of 70 percent or more.

2. As you have indicated, if you are rated at 50% or more, you will receive CRDP.

3. The info I quoted at item has been misunderstood. If you were a regular retiree (i.e., 20 AD, non-disability/non-CH61), yes, you would receive all your retired pay and all yourr VA compensation.

4. As a Chapter 61 retiree who also qualifies for a regular retirement, the following will occur in accordance with current law:
a. Your retired pay will likely be the average of your highest 36 months base pay x DoD disability percentage= retired pay. I said "likely" since you predict a 75% rating.

b. The retired pay at item 4a will be reduced by the amount of your VA compensation. Occasionally, there is residual (left over) retired pay.

c. CRDP will restore some of the "reduction." Note: For a CH 61 retiree, the amount of CRDP plus residual retired pay cannot exceed the dollar amount of the longevity portion of retired pay.

d. You will also receive all your VA compensation.

5. Here is a real scenario where my computation and that of DFAS mirrored one another:
a. Gross retired pay = 5726
b. VA compensation = 3079.47
c. A minus B = 2646.53 residual retired pay
d. Dollar amount of longevity portion of retirement = 4023
e. D minus C = 1376.47 CRDP
f. Result: DFAS pays 4023 (2646.53 residual ret pay + 1376.47 CRDP)
VA pays 3079.47
TOTAL: 7102.47

Ron
 
Thanks Ron. So, if I am already rated at 100% from the VA and the DOD rates me 75% for retirement. I have been a SMSgt for 7 years. Iwill be in a little over 20 years. I can get CRDP but will not qualify for CRSP. So, since I am already at 100% VA, I would need to also be IU as well to collect my full 75% retirement money from the VA at 100% as well?

Thanks again, this stuff is so confusing. Jade
 
Thanks Ron. So, if I am already rated at 100% from the VA and the DOD rates me 75% for retirement. I have been a SMSgt for 7 years. Iwill be in a little over 20 years. I can get CRDP but will not qualify for CRSP. So, since I am already at 100% VA, I would need to also be IU as well to collect my full 75% retirement money from the VA at 100% as well?

Thanks again, this stuff is so confusing. Jade
No, that is not the case. You will be limited by the dollar amount of the longevity portion of retirement pay. VA compensation is paid is by the VA. Additionally, IU is not granted to those 100%; there would be no reason since they already receive the 100% compensation. IU is not in addition to other VA comp.

Recommend you review my detailed posts above.

1. Finally, the only way you will receive all your retired pay as a CH 61 retiree is to decline VA compensation. That would be a major mistake for most people.

2. Regardless of the amount of your VA compensation,that amount will reduce your retired pay.

3. You will receive from DFAS, an amount that is limited to the dollar amount of longevity portion of retirement pay. The composition may be residual retired pay + CRDP or just CRDP.

4. You will receive your VA compensation from the VA. As a Chapter 61 retiree, you will receive the amounts described at no. 3 from DFAS.

Ron
 
So I never be able to collect retirement pay at 75% since I have 0nly been in 20 years and my full VA pay no matter what?
 
So I never be able to collect retirement pay at 75% since I have 0nly been in 20 years and my full VA pay no matter what?
There will be accounting for it in total, but the deduction will be part of the accounting.

Bottom line:
—You are correct and it will be in accordance with laws that are not new.

Ron
 
Concurrent Receipt

In 1891, Congress first prohibited payment of both military retired pay and a disability pension under the premise that it represented dual or overlapping compensation for the same purpose. The original law was modified in 1941, and the present system of VA disability compensation offsetting military retired pay was adopted in 1944. Under this system, retired military personnel were required to waive a portion of their retired pay equal to the amount of VA disability compensation, a dollar-for-dollar offset.

If, for example, a military retiree received $1,500 a month in retired pay and was rated by the VA as 70% disabled (and therefore entitled to approximately $1,000 per month in disability compensation), the offset would operate to pay $500 monthly in retired pay and the $1,000 in disability compensation. The advantage for the retiree was that VA disability compensation was not taxable. For many years some military retirees and advocacy groups sought a change in law to permit receipt of all, or some, of both payments. Opponents of concurrent receipt frequently referred to it as double dipping, maintaining that it represented two payments for the same condition.
In the FY2003 NDAA (P.L. 107-314), Congress created a benefit known as Combat Related Special Compensation (CRSC). CRSC provided, for certain disabled retirees whose disability is combat-related, a cash benefit financially identical to what concurrent receipt would provide them. The FY2004 NDAA (P.L. 108-136) authorized, for the first time, the phase-in of actual concurrent receipt (now referred to as Concurrent Retirement and Disability Payments or CRDP), and a greatly expanded CRSC program. The FY2005 NDAA (P.L. 108-375) further liberalized the concurrent receipt rules contained in the FY2004 NDAA and authorized immediate concurrent receipt for those rated by the VA totaling 100%. The FY2008 NDAA (P.L. 110-181) expanded concurrent receipt eligibility to include those who are 100% disabled due to unemployability and provided CRSC to those who were medically retired or retired prematurely due to force reduction programs prior to completing 20 years of service. CRDP phase-in was fully implemented by 2014, allowing retirees with a disability rated at 50% or greater to receive full retired pay and full VA disability compensation without an offset. [Note: The offfset still applies to disability retirees/Chapter 61.]

Reference: Congressional Research Services, January 2019
Added:
Special Rules for Chapter 61 Disability Retirees: Members retired for disability under Chapter 61 of title 10 United States Code may be entitled to CRDP only if they have at least 20 years of service qualifying for regular or reserve retirement. Additionally, any disability retired pay that is in excess of retired pay to which that member would be otherwise entitled (i.e., for years of service x 2.5%) remains subject to offset and may not be restored under the CRDP program.
——

The limitations I discussed with you are included in the laws governing the payments. Our elected representatives were the designers of the laws. If you would like additional info on the laws, please see
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 64

Here is an actual case, similar to your situation:

a. Gross retired pay = 5726
b. VA compensation = 3079.47
c. A minus B = 2646.53 residual retired pay
d. Dollar amount of longevity portion of retirement = 4023
e. D minus C = 1376.47 CRDP
f. Result: DFAS pays 4023 (2646.53 residual ret pay + 1376.47 CRDP)
VA pays 3079.47
TOTAL: 7102.47


Ron
 
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