If DoD rates TDRL 60% and VA 60% for a ch 61 retirement/medboard is it still wise to choose the VA compensation over the DoD?
Thanks
@PERS-95 @RetiredAtty @chaplaincharlie
Thanks
@PERS-95 @RetiredAtty @chaplaincharlie
Hypothetical
- Thread starter Gizzy
- Start date
Even if the VA is 10% and the DoD is 100%, I would choose the VA compensation.
The DOD would be 75% x high three = disability retirement.
The VA would be 165.92
The DoD in this example would be reduced by the VA $165.92= residual retired pay
The VA would pay the 165.92
Also, if otherwise eligible, the retiree can apply for CRSC.
Ron
You don't really "choose" like that. The way I understand it being done now, DFAS will tell you the different ways they calculated, but it's not like they are going to let you make a choice that causes you to lose money that you have earned. I will let someone else who has more recent experience with DFAS jump in here though.
@PERS-95 and @Gizzy
The choice is on the VA application form for VA compensation. DFAS is not part of that decision. You might be thinking of CRDP and CRSC where the DFAS automatically pays the higher amount when eligible for both.
Back to the VA form. I believe it is block 26. If you want VA comp you leave the block unchecked. If you do not agree to waive retired pay dollar for dollar etc., you check the block. I have not looked at the form in years. I will review it in a few.
The VA Form:
Downloadable PDF
Download VA Form 21-526EZ (PDF) <—-LINKRon
IMPORTANT INFORMATION ON MILITARY RETIRED PAY (Includes all Uniformed Services Retired Pay):
Submission of this application constitutes a waiver of military retired pay in an amount equal to VA compensation awarded, if you are entitled to both benefits. Your retired pay may be reduced by the amount of VA compensation awarded. Receipt of the full amount of military retired pay and VA compensation at the same time may result in an overpayment, which may be subject to collection. If you qualify for concurrent receipt of VA compensation and military retired pay, the waiver of retired pay will not apply.
If you do not want to waive any retired pay to receive VA compensation, you should check the box in Item 26.
Note that if you check the box in Item 26, you will not receive VA compensation, if granted. If you are currently in receipt of VA compensation and you check the box in Item 26, your VA compensation will be terminated, if you are also eligible for military retired pay.
IMPORTANT: VA COMPENSATION PAY IS NON-TAXABLE. THEREFORE, VA COMPENSATION PAY MAY BE THE GREATER BENEFIT.
[. ] 26. Do NOT pay me VA compensation. I do NOT want to receive VA compensation in lieu of retired pay.
( box at item 26)
Last edited:
That makes a lot of sense. The way people call it a choice, it makes it sound like they are rejecting pay options altogether. But making the choice whether to waive their retired pay in favor of the VA pay is a whole different thing, and I was not thinking about that. Thank you for clarifying.
Excellent question.
Under the circumstances you describe, IF the VA percentage goes down (i.e., is reduced) that would result in LESS reduction/waiver of retired pay. Remember, the waiver is dollar for dollar in the amount of VA compensation received. In other words, your net retired pay would increase.
Related: The "choice" or selection mentioned with regard to the "box" at item 26 of the VA form is not necessarily a lifetime selection. You can change it whenever you want. I have not looked at that provision in years also, but I doubt it has changed. A simple letter to the VA expressing your desire to change your selection would work. The reference is M21-1.
Also related: I used to encounter retirees who did not understand the then-confusing language on the form. Our discussions were about how to fix the problem of making the wrong selection. All this is from around 10 years ago or so on another board.
Ron
cc: @Provis @PERS-95 @chaplaincharlie
Thank you so much. You guys are wonderful!
Ron,
New user here. I am just finishing up my PEB and got my ratings. My VA is 80% and DOD is 70%. From what I understand, I waive a portion of my DOD compensation dollar by dollar by my VA amount. My question is whether that amount is taxable or if that offset covers any tax. I am also non-combat related and under 20 AD.
I would have started a new thread but I have no idea yet how to do that so I apologize, I know many people here are over 20 AD and combat but I was hoping to get some help.
Thanks.
Hello @packers27
Since it appears that much (or all) of your retired pay will be waived in order to receive VA compensation.
1. The amount of retired pay waived/reduced/offset is not taxed. Also, VA compensation is not taxed.
2. Any residual (left over) retired pay from the VA offset will be taxed since you mentioned non-combat.
Ron
Last edited: