Medical Sep vs Medical Retirement for CRSC and FERS buyback

N

notsomoto

PEB Forum Regular Member
Registered Member
Hi,

I'm trying to figure out how to make this all fit and hopefully the smart folks here can help.

I medically separated at 15 years 11 months with 20% DoD disability, 100% P&T VA disability ($3850)- spouse & 2 kids w. SMC (high 3 average would have been somewhere around $4525 if that helps give a soft estimate on the severance package)

I am a year into petitioning for my upgrade to medical retirement based on documented combat related injuries. I can't give a guess on how much of an increase that might be from the original 20% but from reading some of the forums, there seems to be a separate percentage associated to CRSC necessary to determine payout. I watched the youtube video and downloaded the calculator only to realize I am not ready to cross that bridge without knowing what it will be.

The request can come back 3 ways - Yes to the upgrade with X % as the operating DoD disability %, Yes to the combat related status with X CRSC % / Yes to the upgrade, no to the combat related status / No to the upgrade.

In the best case scenario, I've been told (by a source that is right 90% of the time in similar, yet less complicated issues) that I won't pay back the severance and, given certain assumptions, I will gain a nontaxable monthly compensation slightly less than what my presumably waived medical retirement might be, prior to VA offset.

To complicate it a little further, I am hoping to enter federal service and possibly buy back that time so that after 9 years of additional service, I will have access to that 25 year retirement at age 55 without penalties. There are a ton of resources that talk about full 20+year retirees not being able to buyback time without waiving pay etc. but I don't know how that applies to medical retirees dealing with VA offset and no CDRP.

This is DFAS's policy on VA offset which gives me hope :

The law requires that a military retiree waive a portion of their gross DoD retired pay, dollar for dollar, by the amount of their Department of Veterans Affairs (VA) disability compensation pay; this is known as the VA waiver (or VA offset).

But the US Code states the following:

(Preliminary CRSC Criteria)

3. Is entitled to retired pay, notwithstanding that such retired pay may be reduced due to receipt of VA disability compensation.

a. A member who waives military retired pay in order to credit military service for purposes of a civil service retirement, or for any reason other than to receive disability compensation from the VA, is not eligible for CRSC.

(Time wise, the determination to be granted CRSC by the branch of service would predate the federal buyback and I would obviously waive military retired pay for VA when that option becomes available. The rubber meets the road when I walk into Fed HR and start the buyback process)

If My VA offset nullifies my potential DoD medical retirement pay completely and I begin receiving CRSC as special compensation, Can I still buy back my time towards federal service?

If I project a 70% DoD and a 50% CRSC allowance, what does that look like pased on my particulars at the top?

(More questions to follow, thank you for any assistance provided)
 
Addressing only part of your questions—

1. Your DoD retired pay will be reduced dollar for dollar in the amount of your VA compensation
2. Your retired pay will be (pre-offset) the higher of
—active duty time x 2.5% (2% if enrolled in the blended retirement plan) = longevity multiplier; and average high three base pay x longevity multiplier = longevity portion of retired pay
OR
—DoD disability retired percentage x average high three base pay = retired pay
3. Your CRSC, if eligible, would be the lesser of
—longevity portion of retired pay
OR
—the amount in the VA comp tables that is shown for your approved CRSC percentage

Recommend you receive confirmation from both DFAS and OPM that you can still receive CRSC under the circumstances you described (buy back).

Several on another board have been told they cannot.

Ron
 
So, here's my take - worry about CRSC once your petition is complete. Get into FERS, talk to OPM as @RonG mentioned above. CRSC will retro pay UP TO SIX years or retirement date, whichever is more recent so you have time to get this figured out before making a potential mistake. IMHO, of course.

Btw, if you're upgraded to retiree, that date "should" be set to be the date you originally separated, so keep that in mind.
 
If your disabilities come back (hopefully) as combat-related, you do not have to wave your retired pay for FERS service. You will have to pay/make the deposit for your military service time if you do want to pursue a FERS retirement for your years of military service. You request DFAS to calculate the deposit and you can choose to pay it or not. I was in this situation and while it took a minute to explain it to the Civilian Personnel Advisory Center (CPAC) to understand it, it is true. You will have three years to pay the deposit when you enter FERS service, but you can pay it at any time after that with some interest penalty. I left federal service after a year so I did not pay the deposit.

The key is your retirement orders stating that your injuries are combat-related. I believe (could be wrong) that CRSC does not qualify you for this exception.

www.opm.gov

Military Retired Pay

Welcome to opm.gov
www.opm.gov www.opm.gov

Also, another benefit of the "combat/instrument of war" lines saying yes on your retirement orders for FERS is that all you military time will count for your leave date calculation. In my case, I received credit for my 15.5 years of active service and started out earning the maximum amount of leave possible (1 day per 80-hour pay period/2 per month).
 
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RonG said:
Addressing only part of your questions—

1. Your DoD retired pay will be reduced dollar for dollar in the amount of your VA compensation
2. Your retired pay will be (pre-offset) the higher of
—active duty time x 2.5% (2% if enrolled in the blended retirement plan) = longevity multiplier; and average high three base pay x longevity multiplier = longevity portion of retired pay
OR
—DoD disability retired percentage x average high three base pay = retired pay
3. Your CRSC, if eligible, would be the lesser of
—longevity portion of retired pay
OR
—the amount in the VA comp tables that is shown for your approved CRSC percentage

Recommend you receive confirmation from both DFAS and OPM that you can still receive CRSC under the circumstances you described (buy back).

Several on another board have been told they cannot.

Ron
Click to expand...
Hi Ron,

Thank you for taking the time, you're insight on this forum has been invaluable for so many. I'll try and fill in the blanks a bit to help with the overall equation.

My longevity payout should sit just below 1800 ( I missed BRS eligibility by 4 months, not that I would have taken it, regardless). I'm assuming the VA pay chart for purposes of spec. comp. (if I get 50% for the CRSC as an example) would be sitting somewhere south of 1200 given a spouse w. 2 kids, the lesser of the two possible payouts. If I'm still not getting it, let me know. For some reason I thought TIS still effected the equation but I guess that it's not the case.

Can you link me to any discussions on CRSC and Fed buyback on this forum, a cursory search didn't bring anything up but I would love to see what others have found in their research.
 
RetiredColonel-MikeT said:
So, here's my take - worry about CRSC once your petition is complete. Get into FERS, talk to OPM as @RonG mentioned above. CRSC will retro pay UP TO SIX years or retirement date, whichever is more recent so you have time to get this figured out before making a potential mistake. IMHO, of course.

Btw, if you're upgraded to retiree, that date "should" be set to be the date you originally separated, so keep that in mind.
Click to expand...
Hi Mike,

This bears consideration now because I will be faced with the option of paying back my rather large severance or refusing the upgrade to medical retirement if the condition does not come back as combat related, thereby opening the door for CRSC through the service branch.

IF (I'm not sold the determination will likely come back favorable but if it does, it presents the decision point) the increase from my current 20% to whatever is small, (let's say only another 20% is added totaling 40% dod) this seems to mean my CRSC will be subjectively minimal, like 400 at best. If this somehow denies me access to FERS or requires the severance payback, I think I'll just keep the benefits package I have (the only real difference I'm seeing is my family is off CHAMPVA for TFL and I'm not suffering through rural Community Care protocols)

These assumptions are built on a shaky understanding of how this all works so please feel free to correct any misconceptions.
 
FmrArmyAvatr said:
If your disabilities come back (hopefully) as combat-related, you do not have to wave your retired pay for FERS service. You will have to pay/make the deposit for your military service time if you do want to pursue a FERS retirement for your years of military service. You request DFAS to calculate the deposit and you can choose to pay it or not. I was in this situation and while it took a minute to explain it to the Civilian Personnel Advisory Center (CPAC) to understand it, it is true. You will have three years to pay the deposit when you enter FERS service, but you can pay it at any time after that with some interest penalty. I left federal service after a year so I did not pay the deposit.

The key is your retirement orders stating that your injuries are combat-related. I believe (could be wrong) that CRSC does not qualify you for this exception.

www.opm.gov

Military Retired Pay

Welcome to opm.gov
www.opm.gov www.opm.gov

Also, another benefit of the "combat/instrument of war" lines saying yes on your retirement orders for FERS is that all you military time will count for your leave date calculation. In my case, I received credit for my 15.5 years of active service and started out earning the maximum amount of leave possible (1 day per 80-hour pay period/2 per month).
Click to expand...
Hi,

Correct me if I'm wrong, If my retired "pay" is completely offset by my VA (3850 for 100% P&T, longevity pay would only be 1800), the only addition to my current monthly payout would be whatever is allowed via CRSC.

I'm tracking the buy back payout but I'm wondering if nothing changes and I just walk in today, would DFAS/OPM calculate my severance as a portion of my military pay. This would be like adding another 3 years of pay towards that 3% total buyback, not very ideal.

This might demonstrate how little I know but I was under the impression that CRSC requires service ending injury(ies) from combat for consideration. If I'm upgraded based on combat related injuries by even 10%, then I'll be considered medically retired due to said form of disability.

I would be lying if I said the leave benefit you mentioned isn't another huge draw point for finishing service. My work in the private sector wouldn't even consider such a benefit, regardless of tenure in the position.

It sounds like we left service at a very similar time but I'm guessing you TERA'ed and are thus entitled to CDRP. If that isn't the case, please expand on the exemption of waiving military retirement. I don't see how I'll have both VA dis and a dod retirement without CDRP. CRSC is a nontaxable payment, not considered as a pension whatsoever.
 
notsomoto said:
Hi,

This might demonstrate how little I know but I was under the impression that CRSC requires service ending injury(ies) from combat for consideration. If I'm upgraded based on combat related injuries by even 10%, then I'll be considered medically retired due to said form of disability.
Click to expand...
Hello @notsomoto

There are thousands of military retirees who receive CRSC but did not receive a disability retirement. I am one of them. I retired with a regular 20-year retirement in 1991.

This is from 2017 (click on image to enlarge):
 

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Hello @notsomoto

Ref: "Can you link me to any discussions on CRSC and Fed buyback on this forum, a cursory search didn't bring anything up but I would love to see what others have found in their research"

I do not have any discussions marked as saved Favorites. I did find several FERS discussions by simply using the SEARCH feature at the upper right of the forum pay. Recommended search item: FERS

Ron

edited to add:
Recommendation: Confirmation from both DFAS and OPM that one can still receive CRSC under the buy back process would be wise.
 
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Hello @notsomoto

Ref: "I medically separated at 15 years 11 months with 20% DoD disability, 100% P&T VA disability ($3850)- spouse & 2 kids w. SMC (high 3 average would have been somewhere around $4525 if that helps give a soft estimate on the severance package)"

Calculation and Payment​


Disability severance pay is a one-time lump sum payment. The amount equals 2 months of basic pay for each year of service which includes active service and inactive duty points, but the total service years cannot exceed 19 years. Additionally, the minimum number of years required for computation purposes is six years for a disability incurred in the line of duty in a combat zone, or 3 years in the case of any other member. Prior to January 28, 2008, a maximum of 12 years and minimum of three years creditable service was used.

Summary:
a. Active-duty years OR active-duty equivalent years times two
b. The result at item "a" times the basic pay to which the member is entitled at the time of separation or placement on the temporary disability retired list = severance pay for disability

Six months or more is rounded to the next higher year.

Ron
 
RonG said:
Hello @notsomoto

Ref: "I medically separated at 15 years 11 months with 20% DoD disability, 100% P&T VA disability ($3850)- spouse & 2 kids w. SMC (high 3 average would have been somewhere around $4525 if that helps give a soft estimate on the severance package)"

Calculation and Payment​


Disability severance pay is a one-time lump sum payment. The amount equals 2 months of basic pay for each year of service which includes active service and inactive duty points, but the total service years cannot exceed 19 years. Additionally, the minimum number of years required for computation purposes is six years for a disability incurred in the line of duty in a combat zone, or 3 years in the case of any other member. Prior to January 28, 2008, a maximum of 12 years and minimum of three years creditable service was used.

Summary:
a. Active-duty years OR active-duty equivalent years times two
b. The result at item "a" times the basic pay to which the member is entitled at the time of separation or placement on the temporary disability retired list = severance pay for disability

Six months or more is rounded to the next higher year.

Ron
Click to expand...
Hi Ron,

Already received the lump sum and understand how it's calculated. The only way I keep it and upgrade to medical retirement is if the additional injury is seen as combat related. That blurb from my first post was simply to highlight the amount was large and I have little inclination of returning it.

Still in the process but I've managed to find a few almost parallel examples of folks that have done what I'm asking. As much time as I have these days, I don't like wasting it trying to get someone on the phone from DFAS or OPM but it might come down to that soon.

You're absolutely right about "service ending" not being a crucial factor for CRSC, I erroneously added that based on the discussion of exiting service under the PEB.
 
notsomoto said:
Hi Mike,

This bears consideration now because I will be faced with the option of paying back my rather large severance or refusing the upgrade to medical retirement if the condition does not come back as combat related, thereby opening the door for CRSC through the service branch.

IF (I'm not sold the determination will likely come back favorable but if it does, it presents the decision point) the increase from my current 20% to whatever is small, (let's say only another 20% is added totaling 40% dod) this seems to mean my CRSC will be subjectively minimal, like 400 at best. If this somehow denies me access to FERS or requires the severance payback, I think I'll just keep the benefits package I have (the only real difference I'm seeing is my family is off CHAMPVA for TFL and I'm not suffering through rural Community Care protocols)

These assumptions are built on a shaky understanding of how this all works so please feel free to correct any misconceptions.
Click to expand...
Actually, this is an incorrect statement - CRSC is based not on DoD, it is based on what comes back for your VA rated conditions (10% or more) that come back as "combat-related", so, the "40% DoD" if that's where you land, only guarantees you a disability retirement, does not determine your CRSC compensation. What does determine your compensation is your high average 36 x 0.025 (2.5%) x approx 16 (years of service) = that determines one of the "caps" to your CRSC amount, which can be a) what you would have been entitled to IF you were able to take a length of service (LOS) retirement at time of separation OR the approved combat-related percent based on the VA schedule of compensation, whichever is lower. There can be other limiting factors and in some cases, people are approved for CRSC but are not entitled to pay, but we can visit that at another time, I think we're getting a little bit too far ahead of the horse at this point.

I hope this helps :)
 
Any updates on how this turned out @notsomoto ? I'm in a very similar situation and how no idea how to proceed or where to seek the next steps.
My story and maybe someone can help guide me where to go.

Enlisted in MC reserves, switched to Officer ranks. Put on Med board (IDES pilot 2010ish) initially for knee injury. Was diagnosed with PTSD and mTBI, major stomach issues (IBS ect.) and shoulder tear/repair. Went to final PEB in DC and came back with not fit, medical separation with severance. DoD 10% (knee) VA 70%. They did not include PTSD because they said because I got a Master's degree with high GPA I wasn't that bad and found 1 note in medical file where I said I was feeling better. I petioned for relief to include PTSD and other conditions and was denied. I was granted relief and my injury for knee was deemed combat related. I received 170k tax free severance. Shortly after separation my VA disability rating increased to 100%P&T, with Sleep Apnea added and PTSD rated at 70% (increase from 30% at time of board). I am currently a GS employee and have 7 years of service and looking to buy back. Whenever I think about all this it makes me sick and feel I was screwed out of medical retirement.

I know I will need to petition the BCNR but not sure if I should seek a lawyer or do it on my own. Any recommendations would be greatly appreciated.
 
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