"I was rated 40% permanent retirement from DOD and 80% from va . I opted to waive dod pay for va pay, now im nervous because i have read va can lower your rate. I doubt i would ever get dropped below the fourty% awarded by dod, but my question is worse case scenario if the va lowered me much could i switch back to getting paid my permanent retired dod pay? And what regulations would cover this thank you"
My concern was that the OP was under the impression that if their VA was decreased below the amount of their DoD retirement, they would only receive the VA amount because they had elected to receive VA over DoD. The terms "elected to receive VA over DoD" and "elected to receive DoD over VA" befuddles the hell out of me. Where is it in the process that one elects VA over DoD or vice versa? To me this election choice is a dangerous myth. If I am wrong, please specifically tell me where in the process one chooses VA over DoD.
When one undergoes DES evaluation, they can and are encouraged to file for VA compensation. If one elects to do this, (and they always should) they elect to have VA compensation offset their DoD retirement. They are not choosing one over the other as the VA offset is only up to the amount of the DoD retirement. If my DoD retirement is $3,000 and my VA is $2,000 I still get $3,000, $2000 from the VA and $1,000 from DoD. I can never get less than the higher of the two. The VA form use to be and may still be counterintuitive with a section where one had to chose to have their VA offset the DoD retirement. I have seen some ignorantly chose not to do so as it doesn't sound like smart this to do, that is, forfeit their retirement. In those cases where they state they don't want VA to offset their DoD, they actually end up forfeiting their VA compensation which can be higher than their DoD retirement and/or replace their taxable DoD retirement with non taxable VA. Further, this offset of VA of DoD retirement can possibly be partially or completely be restored via CRDP or CRSC but only if one is actually getting VA compensation.
Again, I know of no scenario where it makes sense not to have VA compensation offset DoD retirement. Jason brings up family law (divorce scenarios) as a rare but potential scenario to elect not to get VA. I don't get this at all. VA, as I understand it, is not a divisible asset for divorce purposes although I believe it can be a factor for child support. Again, this is certainly not my strong suit by if anyone can explain the basic framework why such a choice is a smart thing to do, I would like to understand it.
I do know that choosing DoD disability retirement over LOS retirement or choosing one's lower disability rating percentage over their higher LOS percentage to base their disability retirement on could potentially make sense because, as a general rule, disability based income is better protected in divorce court. But again, I fail to see how not choosing to receive VA compensation benefits anyone in any scenario to include divorce scenarios.
Whenever I see a posting that ask if one should chose DoD over VA or vice versa, it is like fingernails on a chalkboard for the reasons I lay out above. Again, my position is that a choice of actually only getting one or the other, (as opposed to VA offsetting DoD retirement dollar for dollar), is a dangerous myth that can set people up for failure.
A related issue I have seen is those who receive severance pay refusing to get VA because it would require them to payback their severance. Again, at the surface level, I can understand why individuals misunderstand the issue. I once saw a statistic from the legacy days where 20% of the individuals receiving severance pay did not file for VA. Not only did these individuals screw themselves out of VA compensation, they missed an opportunity to get their condition properly rated by the VA which could have made the difference in a PDBR filing. My position once again is that one should always file for and receive VA. In the severance situation, the sooner one files for VA, the sooner they payback their severance and thus the sooner they collect VA for all conditions. If one waits to file for VA they are simply forfeiting VA compensation in the interim.
Again, if anyone can specifically describe a scenario where not filing for and accepting VA compensation makes sense, I am all ears.
I agree that we need a pinned and concise response to this issue that can be referenced when these type of questions arise.
Mike