I'm still confused on both the process and the way to calculate chapter 61 and CSRC.
Did your wife have to apply to receive Chapter 61 compensation, or is that automatic? I was under the impression I submitted for retirement and then DFAS determined which method was most monitarily adventagous for the service member, CRDP or CSRC.
I'm proposed 100% VA (still waiting for final determination), I'm 60% DoD combat coded. I have 4792 points and higher 3 as LTC with 23 years of service.
When I run the 2 calculations (60% disability vs years of service) I get $6330 and $3530, respectively. I thought I subtracted VA from the disability and then got the remainder as CSRC (once I applied and was approved). The alternative, I thought, was that since I am 60% combat coded I could draw all my retired pay tax free in addition to my VA payments. Similar friends on the AD side have done this and get both their full retirement pay tax free and VA compensation, with similar combat ratings.
Am I way off?
Thanks for any help breaking it down for me.
Close but no cigar. If your 60% DOD combat related unfitting condition then your chapter 61 pension is exempt from taxes. Since you are a LTC you probably have some money left after VA offset. That is leftover chapter 61 pension that is exempt from federal taxes. due to your chapter 61 pension being exempt form federal taxes. CRSC is just another way to recoup money lost due to VA offset. If you can max out total compensation via CRSC there is no point in applying for your Reserve retirement especially since all of your income would be tax exempt. CRSC is tax exempt too.
The guidelines that are used by the PEB and CRSC for combat related use completely different laws. CRSC uses the VA pay tables for compensation. So if 60% CRSC then all you have to do is look at the VA tables for 60% pay and that is the most you can get. However, there are caps. That is because you can't get more than the combination of your total VA compensation & your earned longevity pension. So take 4792 and divide by 360 = 13.3 years. x that by 2.5% = 33.25%. Take that number and multiply that by your high 3. You can calculate your high three by taking your gross chapter 61 pension amount and dividing that number by 60%. Lets say its $10,000 for this example. If you take that amount and multiply it by 60% which is your DOD score it should match your chapter 61 pension amount before any VA offsets. In this case its $6,000. So lets say your total VA is $4,000 and when you multiply 33.25% x $10,000 = $3,325 earned longevity pension. Take that amount and add it to your $4,000 from VA. So the most you can get by law is (3,325 + 4,000) = $7,325. So if your total compensation is $6,000 between your chapter 61 pension and VA compensation you are losing out due to the VA offset. So $7,325 - $6,000 currently getting = $1,325 you are losing out on. Say you apply for CRSC and are approved for 60% and are married with no dependents. Using VA pay tables that is $1,486 per month. If that is the case you will get a separate check tax free for CRSC from DFAS for $1,325 per month since that maxed you out on total compensation.
It that were the case then there is no point in applying for your reserve retirement. You have maxed out your income without needing CRDP and the need to apply for a Reserve Retirement. You can do that if you want but it won't change any of the numbers. You are maxed out on pay. This is the exact scenario that my wife as a 04 Major was in. Good thing too. She had a 20 year letter but joined at age 17 in the Reserves and later direct commissioned to be a major. She was losing out on $1,500 a month due to the offset. She applied with her branch which in her case was the Army and approved for 80% CRSC. Of course she was paid $1,500 since you can't get more than the combination of your earned longevity pension and VA compensation. Since she is 40 she could apply for her earned Reserve Retirement in 20 years at age 60 but it wouldn't help her at all financially so she won't do so.
To answer your question you will get your chapter 61 pension. Its automatic. Any VA compensation will offset it. So if your pension is $6,000 you will only receive $6,000. However if your VA compensation is $4,000 then you will receive a check from the VA for $4,000 and on your chapter 61 retirement statement it will show an offset of $4,000 due to VA. So from DFAS you will get $2,000 which is the amount left over due to you after the VA offset.
Since you gave me some numbers in your situation take your VA compensation amount and add it to $3,530 which is your earned longevity amount. If that amount is higher than your 6,330 then you are missing out on compensation due to the VA offset. I know you can get there by applying for a your reserve retirement but I have found that the CRSC packet might be easier and faster. If you are certain that your CRSC application will be approved for an amount that will max you out then I would do that. My wife applied and was approved in 90 days and she was paid CRSC going forward and then about 3 months later she received a lump sum for the CRSC backpay which was back paid to the day she was medically retired.
You could also apply for your reserve retirement if eligible but that may be a bit more work. Since my wife's conditions were presumptive due to the Pact Act they were guaranteed to be approved simply by having a VA rating for the condition and proof that she was deployed to a qualifying country. So other than the application all it took was a VA award letter and a DD214 showing that she was deployed to both Kuwait and Iraq to be approved for CRSC.
