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The Road to Concurrent Receipt

The Road to Concurrent Receipt. The Next Stop Along the Way December 13, 2003 Osan AB Retiree Activities Office. Overview. Note 1: All pay figures are based on 2003 pay rates Note 2: MOAA pamphlet on 2004 NDAA bill served as basis for Concurrent Receipt portion of this briefing.

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The Road to Concurrent Receipt

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  1. The Road to Concurrent Receipt The Next Stop Along the Way December 13, 2003 Osan AB Retiree Activities Office

  2. Overview Note 1: All pay figures are based on 2003 pay rates Note 2: MOAA pamphlet on 2004 NDAA bill served as basis for Concurrent Receipt portion of this briefing • Introduction and background • The retired pay offset • The Military Coalition • 2000: Special Compensation for Severely Disabled Retirees, expanded in 2001 • 2002: Combat-Related Special Compensation

  3. Overview • 2003: Expands the Combat Related Special Compensation eligibility; and adds first true Concurrent Receipt of disability pay and retired pay • Jan 1, 2004 – What you need to know • Comparing the benefits and eligibility • What must you do to apply • Looking to the future

  4. Introduction and Background • Retired pay offset – the tax on disabled military retirees

  5. Introduction and Background • Retired pay offset – the tax on disabled military retirees • Military retirees eligible for retired pay for years of service have some or all of their retired pay offset by tax-free disability pay

  6. Introduction and Background • Retired pay offset – the tax on disabled military retirees • Military retirees eligible for retired pay for years of service have some or all of their retired pay offset by tax-free disability pay • Some 20-year 100% disabled retirees receive the same pay as 100% disabled veterans who served as little as 2 years; the retiree’s long years of service count for nothing

  7. Introduction and Background • Military service organizations banded together into The Military Coalition

  8. Introduction and Background • Military service organizations banded together into The Military Coalition • Defining common goals added power to lobbying efforts on behalf of all veterans and retirees

  9. Introduction and Background • Military service organizations banded together into The Military Coalition • Defining common goals added power to lobbying efforts on behalf of all veterans and retirees • Over the past decade, elimination of disabled military retiree tax became increasingly prominent as a common goal of TMC

  10. Introduction and Background • Breakthrough in 2000 with legislation defining Special Compensation for Severely Disabled Retirees

  11. Introduction and Background • Breakthrough in 2000 with legislation defining Special Compensation for Severely Disabled Retirees • $300 for 100% disabled; $200 for 90% disabled and $100 for 80% and 70% disabled

  12. Introduction and Background • Breakthrough in 2000 with legislation defining Special Compensation for Severely Disabled Retirees • $300 for 100% disabled; $200 for 90% disabled and $100 for 80% and 70% disabled • In 2001, SCSD increased to $125 for 80% disabled, and added $50 for 60% disabled

  13. Introduction and Background • Breakthrough in 2000 with legislation defining Special Compensation for Severely Disabled Retirees • $300 for 100% disabled; $200 for 90% disabled and $100 for 80% and 70% disabled • In 2001, SCSD increased to $125 for 80% disabled, and added $50 for 60% disabled • Tax-free benefit

  14. Introduction and Background • 2002 legislation added Combat-Related Special Compensation starting Jun 1, 2003

  15. Introduction and Background • 2002 legislation added Combat-Related Special Compensation starting Jun 1, 2003 • All retirees with Purple Heart and with any level of disability rating are eligible for CRSC

  16. Introduction and Background • 2002 legislation added Combat-Related Special Compensation starting Jun 1, 2003 • All retirees with Purple Heart and with any level of disability rating are eligible for CRSC • All others with disability rating of 60% or higher and combat- or operations-related disabilities are eligible for CRSC

  17. Introduction and Background • 2002 legislation added Combat-Related Special Compensation starting Jun 1, 2003 • All retirees with Purple Heart and with any level of disability rating are eligible for CRSC • All others with disability rating of 60% or higher and combat- or operations-related disabilities are eligible for CRSC • Tax-free benefit

  18. Introduction and Background • Limitations of CRSC

  19. Introduction and Background • Limitations of CRSC • Member responsible for application and for providing all supporting documentation

  20. Introduction and Background • Limitations of CRSC • Member responsible for application and for providing all supporting documentation • Except for Purple Heart awardees, benefits limited to 60% or greater disability rating

  21. Introduction and Background • Limitations of CRSC • Member responsible for application and for providing all supporting documentation • Except for Purple Heart awardees, benefits limited to 60% or greater disability rating • Max benefit (100% disabled) of $2,193, even though some members retired in higher grades and for longer service have more retired pay offset by VA disability, and especially for family member add-ons

  22. Jan 1, 2004 – What You Need to Know • Expands CRSC to all disability ratings, not just Purple Heart awardees

  23. Jan 1, 2004 – What You Need to Know • Expands CRSC to all disability ratings, not just Purple Heart awardees • Adds true Concurrent Receipt with front-loaded 10 year phase-in

  24. Jan 1, 2004 – What You Need to Know • Expands CRSC to all disability ratings, not just Purple Heart awardees • Adds true Concurrent Receipt with front-loaded 10 year phase-in • For retirees with at least 20 years service

  25. Jan 1, 2004 – What You Need to Know • Expands CRSC to all disability ratings, not just Purple Heart awardees • Adds true Concurrent Receipt with front-loaded 10 year phase-in • For retirees with at least 20 years service • Also for TERA retirees

  26. Jan 1, 2004 – What You Need to Know • Expands CRSC to all disability ratings, not just Purple Heart awardees • Adds true Concurrent Receipt with front-loaded 10 year phase-in • For retirees with at least 20 years service • Also for TERA retirees • Only those with 50%-100% disability rating

  27. Jan 1, 2004 – What You Need to Know • Expands CRSC to all disability ratings, not just Purple Heart awardees • Adds true Concurrent Receipt with front-loaded 10 year phase-in • For retirees with at least 20 years service • Also for TERA retirees • Only those with 50%-100% disability rating • Eliminates Special Compensation for the Severely Disabled

  28. Jan 1, 2004 – Expanded CRSC • All compensable disability ratings (10%-100%) eligible for combat- and training-related disability pay • As a direct result of armed conflict • While engaged in hazardous service (e.g., flight, diving, parachute duty) • While performing duty under conditions simulating war (exercises, field training) • Through an instrumentality of war (combat vehicles, weapons, Agent Orange, etc.)

  29. Jan 1, 2004 – Concurrent Receipt • Ten-year phase-in, front loaded with 95% of retired pay restored by 2010

  30. Jan 1, 2004 – Concurrent Receipt • Ten-year phase-in, front loaded with 95% of retired pay restored by 2010 • In 2004: $750 for 100%; $500 for 90%; $350 for 80%; $250 for 70%; $125 for 60%; and $100 for 50%

  31. Jan 1, 2004 – Concurrent Receipt • Ten-year phase-in, front loaded with 95% of retired pay restored by 2010 • In 2004: $750 for 100%; $500 for 90%; $350 for 80%; $250 for 70%; $125 for 60%; and $100 for 50% • Retirees eligible for CRSC have annual option to change over to CR and vice versa

  32. Concurrent Receipt Eligibility • All retirees (including National Guard and Reserves) with at least 20 years of service who have a VA disability rating of 50% or higher

  33. Concurrent Receipt Eligibility • All retirees (including National Guard and Reserves) with at least 20 years of service who have a VA disability rating of 50% or higher • Temporary Early Retirement Authority (TERA) retirees (for CR but not CRSC)

  34. Concurrent Receipt Eligibility • All retirees (including National Guard and Reserves) with at least 20 years of service who have a VA disability rating of 50% or higher • Temporary Early Retirement Authority (TERA) retirees (for CR but not CRSC) • Medical retirees who are also eligible for longevity retirement (20 years or more)* * - Chapter 61 retirees would receive same compensation as other retirees with same years of service

  35. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) CR Comparing CRSC and CR

  36. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) CR 50% or higher rating, but all disabilities qualify, not just the combat-related ones Comparing CRSC and CR

  37. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) Full benefit immediately upon approval of claim CR 50% or higher rating, but all disabilities qualify, not just the combat-related ones Comparing CRSC and CR

  38. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) Full benefit immediately upon approval of claim CR 50% or higher rating, but all disabilities qualify, not just the combat-related ones 10-year phase-in, front-loaded to give 95% after 6 years Comparing CRSC and CR

  39. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) Full benefit immediately upon approval of claim Tax-free benefit CR 50% or higher rating, but all disabilities qaulify, not just the combat-related ones 10-year phase-in, front-loaded to give 95% after 6 years Comparing CRSC and CR

  40. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) Full benefit immediately upon approval of claim Tax-free benefit CR 50% or higher rating, but all disabilities qualify, not just the combat-related ones 10-year phase-in, front-loaded to give 95% after 6 years Taxable benefit Comparing CRSC and CR

  41. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) Full benefit immediately upon approval of claim Tax-free benefit Option to change to CR at any time CR 50% or higher rating, but all disabilities qualify, not just the combat-related ones 10-year phase-in, front-loaded to give 95% after 6 years Taxable benefit Comparing CRSC and CR

  42. CRSC All disability ratings, but dependent on how disability was incurred (combat-related) Full benefit immediately upon approval of claim Tax-free benefit Option to change to CR at any time CR 50% or higher rating, but all disabilities qualify, not just the combat-related ones 10-year phase-in, front-loaded to give 95% after 6 years Taxable benefit Can change if eligible for CRSC Comparing CRSC and CR

  43. CR - Retiree 100% Disabled Years 1-5 1 Single retiree with $3,000 retired pay, $2,193 offset ($807 not offset) 2Retiree with spouse, one minor child and two qualified children over 18 = $2,868 offset to retired pay of $3,000 ($132 not offset)

  44. CR - Retiree 100% DisabledYears 6-10 1 Single retiree with $3,000 retired pay, $2,193 offset ($807 not offset) 2Retiree with spouse, one minor child and two qualified children over 18 = $2,868 offset to retired pay of $3,000 ($132 not offset)

  45. The Bottom Line • CRSC Retiree’s total monthly income: • In 2003 $2,868 + $132 + $2,193 = $5,193 • In 2004 $2,868 + $132 + $2,193 = $5,193 • In 2010 $2,868 + $132 + $2,193 = $5,193 • CR Retiree’s total monthly income: • In 2003 $2,868 + $132 = $3,000 • In 2004 $2,868 + $132 + $750 = $3,750 • In 2010 $2,868 + $132 + $2,740 = $5,740

  46. CRSC/CR Flexibility • Retiree with family qualifies for CRSC, takes it for immediate full benefit • As time passes and CR increases, it means more money; changes from CRSC to CR • Children graduate and lose eligibility, reducing VA benefit from $2,868 to $2,318 making after-tax CR less than CRSC • Retiree changes back to tax-free CRSC

  47. What You Must Do to Apply • CRSC • Apply using DD Form 2860 • Include military service records and medical records to support claim

  48. What You Must Do to Apply • CRSC • Apply using DD Form 2860 • Include military service records and medical records to support claim • CR • No action, it will start automatically on January 1, 2004 (although payments may be delayed, you will be paid from this date)

  49. What’s Missing • Concurrent Receipt for those rated at less than 50% for non-combat disabilities

  50. What’s Missing • Concurrent Receipt for those rated at less than 50% for non-combat disabilities • Elimination of the widow’s “tax” on the Survivor Benefit Plan annuity

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