mobile.armytimes.com/article/20140306/SPECIAL14/303060029
Disability pay: simpler, broader, more generous
- Thread starter Combat Eng
- Start date
Best line I saw was...
The biggest difference would be the elimination of the offset policy that prevents wounded warriors from collecting disability payments from both the Defense Department and Veterans Affairs Department. As a result, there would be no need for the convoluted rules for exemptions collectively known as “concurrent receipt.”
http://www.militarytimes.com/articl.../Disability-pay-simpler-broader-more-generous
The biggest difference would be the elimination of the offset policy that prevents wounded warriors from collecting disability payments from both the Defense Department and Veterans Affairs Department. As a result, there would be no need for the convoluted rules for exemptions collectively known as “concurrent receipt.”
http://www.militarytimes.com/articl.../Disability-pay-simpler-broader-more-generous
Does anyone know if a Retiree would have to have served a certain amount of years if medically retired under 20 to get both Retired and Disability
Taken from ....CONCEPTS FOR MODERNIZING MILITARY RETIREMENT MARCH 2014
Value of loss of military career Current DoD disability system Proposed DoD disability system
Disability retirement benefit.
A streamlined disability retirement benefit is part of both
retirement concepts. DoD disability compensation has multiple purposes, including
compensation for the served portion of a potential military career cut short by unplanned
disability. Analysis shows that the current interaction between DoD and VA disability benefits
does not fully compensate for the time spent in uniform and the loss of one's expected remaining
future military career. The proposed disability benefit attempts to close the gap for a greater
number of disabled service members.
Under the proposed system, members deemed unfit and with a DoD disability rating of at
least 30 percent, or with at least 12 years of service, qualify for the benefit. The addition of the
new criteria of using 12 years of service acknowledges the volunteer career choices the member
has made to that point in their service, and provides a retirement when disability causes
premature end to the ability to complete the career. However, the amount of the benefit is based
solely on years of service, not on the disability rating as under the current system. The benefit
equals the average of the highest 36 months of basic pay times years of service times a
multiplier. (The benefit under Concept 1 is the full retirement benefit, not the reduced, partial
benefit during the second career period-that is, there is no reduction during the first tier period.)
The DoD disability benefit would no longer be offset for receipt of VA disability compensation,
and the defined contribution element of the plan would vest immediately. Eliminating the offset
also obviates the need for CRSC or CRDP, used today to restore the VA offset.
Members placed on the Interim Disability Retirement List (IDRL) would receive a benefit
with a floor of 70 percent for the disability rating, which compares with a floor of 50 percent in
the existing Temporary Disability Retirement List (TDRL) method. Currently, a member must
have a DoD disability rating of at least 30 percent and be determined to have a disability that is
not permanent and stable in order to be placed on the TDRL. Under the proposed concept, the
member could be placed on the IRDL if determined to have an unfitting disability that is not
permanent and stable or for which a disability rating has been delayed. Members found unfit for
service, but with a DoD disability rating ofless than 30 percent or with fewer than 12 years of
service, would receive a lump-sum disability severance payment computed as under the current
system. The formula for severance pay would remain at 2 times years of service times the current
monthly basic pay, with a floor of either three or six years of service depending on whether the
disability was combat related.
A comparison of the features of the current disability benefit and the proposed benefit are
captured in Table 2. The proposed benefit would result in increased costs, but savings achieved
in other elements of the proposed retirement system more than cover these costs
Effects on Disability Compensation
The current DoD disability benefit does not fully compensate service members for the
expected value of a lost military career for either enlisted personnel or officers. The concept for
redesign of disability compensation helps to close this gap. The basis for this analysis is an
estimate of the value of a lost military career-a calculation that depends on both financial and
non-financial factors including the length of a military career, whether a member stays in the
military long enough to qualify for retirement benefits, whether an individual plans to retire from
the military and enter a civilian career, and various similar concems.9 The value of being able to
continue a military career changes over the course of a member's career, increasing the closer a
member gets to 20 years of service and retirement eligibility, and also depends on whether the
member is an officer or enlisted.
Figure 17 compares the expected value of a lost military career to the value of the current
DoD disability benefit10 and to the proposed DoD disability benefit under Concept 1 and
Concept 2. As the figure shows, the new disability benefit under Concept 1 (top left and top right
panels) at a DoD disability rating of 50 percent would be greater than the current benefit for both
officers and enlisted personnel. Thus, the new system would be a clear improvement under
Concept 1, due primarily to eliminating the VA offset. (The disability benefit under the current
system (green line) is shown to be negative after 20 years of service because the disability
benefit is less that the benefit the member with 20 or more years of service would have had, had
the member's career not been cut short.)
Under Concept 2 (lower left and lower right panels), the value of a lost career is slightly
lower because the military retirement multiplier is lower. The new disability benefit under
Concept 2 is also lower. For enlisted members, the new disability benefit at a DoD disability
rating of 50 percent would still exceed the current disability benefit, but would fall short of the
value of a lost career. For officers, the new disability benefit would equal what is currently
offered under the existing disability system for officers with fewer than 20 years of service, but
would exceed the existing benefit for those with more than 20 years of service.
A major change from the current system under either of the two concepts is elimination of
the dollar-for-dollar offset required when a member receiving military retired pay also receives
disability compensation administered by the VA. DoD would pay only for years of service while
the VA would pay for the severity of the disability without offset. This construct would also
eliminate, for military disability retirees, the need for either of the concurrent receipt programs
developed to restore or partially restore the offset.
9 The background paper, Toward Meaningful Compensation Reform: Research in Support of the DoD Working
Group on Compensation, 2011- 2013, provides further detail how the value of a military career was estimated.
10 The value of the current DoD disability benefit depends on a number of factors including DoD rating, whether
CRSC relevant, and whether there is an offset to the VA benefit-although the difference by years of service when
these factors vary are generally not large. The analysis here assumes no CRSC offset.
Value of loss of military career Current DoD disability system Proposed DoD disability system
Disability retirement benefit.
A streamlined disability retirement benefit is part of both
retirement concepts. DoD disability compensation has multiple purposes, including
compensation for the served portion of a potential military career cut short by unplanned
disability. Analysis shows that the current interaction between DoD and VA disability benefits
does not fully compensate for the time spent in uniform and the loss of one's expected remaining
future military career. The proposed disability benefit attempts to close the gap for a greater
number of disabled service members.
Under the proposed system, members deemed unfit and with a DoD disability rating of at
least 30 percent, or with at least 12 years of service, qualify for the benefit. The addition of the
new criteria of using 12 years of service acknowledges the volunteer career choices the member
has made to that point in their service, and provides a retirement when disability causes
premature end to the ability to complete the career. However, the amount of the benefit is based
solely on years of service, not on the disability rating as under the current system. The benefit
equals the average of the highest 36 months of basic pay times years of service times a
multiplier. (The benefit under Concept 1 is the full retirement benefit, not the reduced, partial
benefit during the second career period-that is, there is no reduction during the first tier period.)
The DoD disability benefit would no longer be offset for receipt of VA disability compensation,
and the defined contribution element of the plan would vest immediately. Eliminating the offset
also obviates the need for CRSC or CRDP, used today to restore the VA offset.
Members placed on the Interim Disability Retirement List (IDRL) would receive a benefit
with a floor of 70 percent for the disability rating, which compares with a floor of 50 percent in
the existing Temporary Disability Retirement List (TDRL) method. Currently, a member must
have a DoD disability rating of at least 30 percent and be determined to have a disability that is
not permanent and stable in order to be placed on the TDRL. Under the proposed concept, the
member could be placed on the IRDL if determined to have an unfitting disability that is not
permanent and stable or for which a disability rating has been delayed. Members found unfit for
service, but with a DoD disability rating ofless than 30 percent or with fewer than 12 years of
service, would receive a lump-sum disability severance payment computed as under the current
system. The formula for severance pay would remain at 2 times years of service times the current
monthly basic pay, with a floor of either three or six years of service depending on whether the
disability was combat related.
A comparison of the features of the current disability benefit and the proposed benefit are
captured in Table 2. The proposed benefit would result in increased costs, but savings achieved
in other elements of the proposed retirement system more than cover these costs
Effects on Disability Compensation
The current DoD disability benefit does not fully compensate service members for the
expected value of a lost military career for either enlisted personnel or officers. The concept for
redesign of disability compensation helps to close this gap. The basis for this analysis is an
estimate of the value of a lost military career-a calculation that depends on both financial and
non-financial factors including the length of a military career, whether a member stays in the
military long enough to qualify for retirement benefits, whether an individual plans to retire from
the military and enter a civilian career, and various similar concems.9 The value of being able to
continue a military career changes over the course of a member's career, increasing the closer a
member gets to 20 years of service and retirement eligibility, and also depends on whether the
member is an officer or enlisted.
Figure 17 compares the expected value of a lost military career to the value of the current
DoD disability benefit10 and to the proposed DoD disability benefit under Concept 1 and
Concept 2. As the figure shows, the new disability benefit under Concept 1 (top left and top right
panels) at a DoD disability rating of 50 percent would be greater than the current benefit for both
officers and enlisted personnel. Thus, the new system would be a clear improvement under
Concept 1, due primarily to eliminating the VA offset. (The disability benefit under the current
system (green line) is shown to be negative after 20 years of service because the disability
benefit is less that the benefit the member with 20 or more years of service would have had, had
the member's career not been cut short.)
Under Concept 2 (lower left and lower right panels), the value of a lost career is slightly
lower because the military retirement multiplier is lower. The new disability benefit under
Concept 2 is also lower. For enlisted members, the new disability benefit at a DoD disability
rating of 50 percent would still exceed the current disability benefit, but would fall short of the
value of a lost career. For officers, the new disability benefit would equal what is currently
offered under the existing disability system for officers with fewer than 20 years of service, but
would exceed the existing benefit for those with more than 20 years of service.
A major change from the current system under either of the two concepts is elimination of
the dollar-for-dollar offset required when a member receiving military retired pay also receives
disability compensation administered by the VA. DoD would pay only for years of service while
the VA would pay for the severity of the disability without offset. This construct would also
eliminate, for military disability retirees, the need for either of the concurrent receipt programs
developed to restore or partially restore the offset.
9 The background paper, Toward Meaningful Compensation Reform: Research in Support of the DoD Working
Group on Compensation, 2011- 2013, provides further detail how the value of a military career was estimated.
10 The value of the current DoD disability benefit depends on a number of factors including DoD rating, whether
CRSC relevant, and whether there is an offset to the VA benefit-although the difference by years of service when
these factors vary are generally not large. The analysis here assumes no CRSC offset.
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Good stuff!
This would be interesting to see play out. The biggest flaw I see is that a first term soldier would be considerably limited in what they got because it would be based on years of service. They would then have a double whammy against them. First, they would tend to be lower ranking. Second, retirement would be based on years of service based on the lower rank. It would result in a much smaller payment for soldiers seriously injured that could not complete a military career because of their injury.
This would be interesting to see play out. The biggest flaw I see is that a first term soldier would be considerably limited in what they got because it would be based on years of service. They would then have a double whammy against them. First, they would tend to be lower ranking. Second, retirement would be based on years of service based on the lower rank. It would result in a much smaller payment for soldiers seriously injured that could not complete a military career because of their injury.
The article doesn't address the TAX-or-NON-TAXABLE issue of this new proposed change for the disabled concurrent receipt with 12 years of service.
Anyone know how this proposal will play out on the taxability of this concurrent receipt?
nwlivewire
Here is a link to their proposal (PDF)... http://projects.militarytimes.com/pdfs/military-retirement-report.pdf
"....The DoD disability benefit would no longer be offset for receipt of VA disability compensation,
and the defined contribution element of the plan would vest immediately. Eliminating the offset
also obviates the need for CRSC or CRDP, used today to restore the VA offset...."
OK. So would the DoD portion of the concurrent receipt be NON-taxable to a 12-year Veteran who got disabled from military service?
All my eyes could see is the elimination of the concurrent receipt barriers we currently have, but my eyes did not see what the tax status of those DoD monies would be.
V/R,
nwlivewire