Medical Retirement vs VA

RD12

PEB Forum Regular Member
Registered Member
I tried to search for the specific topic but most posts are about CRDP.

Theoretically, I will be recieving a 50-70% disability rating in the next few months. I'm kind of confused about the medical retirement/va payments. Should I elect to receive VA payments over the medical retirement payments? Does anyone know the benifits of each? PROS/CONS??
 

RD12

PEB Forum Regular Member
Registered Member
Oops I forgot to mention that which could be misleading...I have 6 years and do not qualify for CRDP. I was wondering if I should opt for VA or Med. Ret. pay and the pros/cons of choosing one over the other. I know that VA is non-taxable but I can't find any other information on this subject
 

maparker

Moderator
PEB Forum Veteran
Registered Member
You don't really opt. You would get disability retirement pay which will be offset by your VA. Some or all off that offset could be restored with CRSC if you have any combat related conditions being compensated by the VA.

Mike
 

carnelli53

Moderator
PEB Forum Veteran
Registered Member
The most obvious reason to waive DoD disability retirement pay is if the VA disability compensation equates to a greater monthly sum. In many cases, you will simply receive more money by waiving DoD pay in favor of VA compensation. However, it is worth noting that waiver of DoD retirement pay does not extinguish your entitlement to DoD retirement pay.

This issue seems to come up regarding CRSC (Combat Related Special Compensation) benefts. As far as CRSC goes...waiver of DoD disability retirement pay, contrary to what is currently posted on DFAS's website ("To qualify for CRSC you must...waive your VA pay from your retired pay"), has no bearing on your qualification for CRSC. Eligibility for CRSC is premised on your entitlement to DoD retirement pay - waiving DoD retirement pay in favor of VA compensation does not affect your entitlement to DoD pay. Depending on your specific circumstances, it may be better to elect one over the other when considering CRSC, but it is impossible to state that waiver or non-waiver of DoD disability retirement is a good or bad idea as a general rule. The best course of action will vary between each individual.

There are also tax implications to consider, as you stated, DoD disability retirement pay is taxable income. VA compensation is tax-exempt. CRSC payments are also tax-exempt (if you qualify). Again, tax implications are specific to individual circumstances and the best course of action depends on many factors.

Just an opinion, but in the vast majority of cases, it seems that waiver of DoD retirement pay in favor of VA disability compensation is usually the more sensible option. But again, you need to weigh the tax implications, possible receipt of other benefits (e.g. CRSC), and, depending on your personal/spousal situation, the possible divisibility of benefits upon divorce, etc.
 

Slorcoe

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
In my case
my %40 DOD was going to be $1394/month taxed
my %100 VA is calculated at just over $3300 with dependents and 2 SMC codes.

I will also be applying for the CSRC program

So , I 'm taking the VA pay.
 

gunmate1

PEB Forum Regular Member
PEB Forum Veteran
Ok i have a question with regards to that. I am 50% DOD which would equate to 1744 roughly per month taxed and my VA is 80% 1620. I won't be able to get any combat related stuff, but i am curious what would be better. In the long run, right now we don't have any plans for kids. Also is SDP worth it? How much would they acutually take out of my retirement?
 

Jeep Freak

PEB Forum Regular Member
PEB Forum Veteran
Without figuring exactly what the taxes might be, there is only $124 difference. I would think you will get a job and the DoD money would increase your tax bracket because it is taxable. I would go VA (don't think you really have a choice) because it is non-taxable and you would be farther ahead.
 

Slorcoe

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
Gunmate1,

%50 DOD = approx after taxes $1395 vs. your $1620 with no taxes.. i guess you do the math... and as Jeep said its more taxable income to put you at the higher bracket possibly by taking the DoD/DFAS pay check.
 

NDBravehart84

PEB Forum Regular Member
PEB Forum Veteran
Letme pass on what my 199 says " Also, please note that in box 10 of your DA199 it states that your injuries ARE the direct result of" Armed Conflict". This means that whatever monies you receive from the Army WILL NOT be taxable".
 

Robert Albright

PEB Forum Regular Member
PEB Forum Veteran
Personally, I'd take the VA; but that's only because VA can't be garnished by crazy ex-wives. In theory it is possible, but under Rose v Rose it was determined that the ex has to prove that they need the money more than you do. You also might make up the difference on taxes at the end of the year.
 

NDBravehart84

PEB Forum Regular Member
PEB Forum Veteran
Letme pass on what my 199 says " Also, please note that in box 10 of your DA199 it states that your injuries ARE the direct result of" Armed Conflict". This means that whatever monies you receive from the Army WILL NOT be taxable".
So I'm back now..... Everybody here is claiming that ALL DOD $$ are taxable and I don't think thats correct.... Maybe Mike or Jason could clear this up?
 

dkokoszka

PEB Forum Regular Member
PEB Forum Veteran
My DA 199 stated not combat related. My military disability monthly check IS taxed. Of note, I do NOT pay state taxes, I live in Massachusetts.
 

COLTONMD

PEB Forum Regular Member
PEB Forum Veteran
My take DOD Military Retirement is permanent if labeled permanent. VA Disability can be changed at any time unless past 20 years.
 

Jeep Freak

PEB Forum Regular Member
PEB Forum Veteran
We had discussed this prior and yes the VA is not permanent but there would have to be a reason to review it. I also believe that in the future you could always change if need be. I'm not positive on this but I believe that was what I remember.
 

shaugnmiller

PEB Forum Regular Member
PEB Forum Veteran
My take DOD Military Retirement is permanent if labeled permanent. VA Disability can be changed at any time unless past 20 years.
Could you please explain what you mean by VA not being permanent under 20 years? Thanks.
 

shaugnmiller

PEB Forum Regular Member
PEB Forum Veteran
We had discussed this prior and yes the VA is not permanent but there would have to be a reason to review it. I also believe that in the future you could always change if need be. I'm not positive on this but I believe that was what I remember.
Another reference to VA not being permanent....does this mean it could go down over time?
 

COLTONMD

PEB Forum Regular Member
PEB Forum Veteran
Another reference to VA not being permanent....does this mean it could go down over time?
What I have been told VA disability is only Permanent after having it for 20 years. I also was told a review takes place every 5 years; which might make one or a few ailments lower. Now I never heard of this happening but why chance it.
 

SGT Bob

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
What I have been told VA disability is only Permanent after having it for 20 years. I also was told a review takes place every 5 years; which might make one or a few ailments lower. Now I never heard of this happening but why chance it.
True...and it is also possible that ratings are increased.
 

maparker

Moderator
PEB Forum Veteran
Registered Member
If your unfitting condition is combat related then your disability retirement is not subject to federal income tax. Else it is taxable unless you were obligated to join the military on or before Sep 24(?) 1975.

Can somebody please show me a form where one is required to chose between military retirement and VA?

I think this is a bit misleading. You get both but the VA offsets the DoD retirement. Now, if the VA is greater than the DoD disability retirement there may be an antiquated requirement to waive the DoD retirement to get the higher VA. It is my belief that this dates back to the days before CRDP and CRSC.

If the VA is higher than you should still be able to get CRDP or CRSC to restore all or part of your DoD retirement if eligible for those programs.

If DoD is higher, it will still be offset by non taxable VA dollars.

I would only chose the VA if such a choice was required to get a VA amount that was higher than my DoD retirement and then I would file for CRSC, if eligible.


Mike


Mike
 
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