Military Retirement — Special Six-Part Series — Part 3 — Disability Benefits
Here’s the third installment in our six part Military Pay series. Other posts are here:
Introduction
In return for years of service, the military offers an array of benefits for retirees, including a pension adjusted every year for inflation, money for college, health-care coverage and more. These days the options for military retirement are even more complex than most any civilian plan. While some benefits are tiny, others are huge, and not everything happens automatically. If you’re retired, retiring or you have a client affected by these issues; RetirdPay.com will be running a special five part series this week…..
20-year Retirement
Here’s how the magic 20 years (or higher) Military Retirement system works. As you can see from previous discussions it is a defined benefit system. Military members don’t make a contribution. They perform their duty while receiving their legal pay and allowances, then, when requirements are met, they are eligible for a retirement annuity….
Death benefits
Regardless of a veteran’s status at death … active or retired, the Department of Veterans Affairs does not provide military funeral honors; the Defense Department does. However, the VA, active-duty military and many veterans groups pool their resources to provide financial help, practical assistance and military honors on such occasions….
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Disability Retirement
The Defense Department offers two types of disability retirement:
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Permanentt disability: People officially rated as at least 30 percent permanently disabled, according to guidelines, are entitled to disability retirement pay from the Defense Department
- To qualify, they must have spent at least eight years in the military, or the disability must have been incurred in the line of duty.
- If one of the requirements is met, the retiree can receive retired pay based on the larger of two formulas:
- Multiply the amount of the retired pay base by 2.5 percent for each year of service,
- or multiply the retired pay base by the percentage of disability
- Temporary disability: Some service members have medical problems that prevent them from carrying out their military duties but may not be permanent. They are placed on the temporary disability retirement list maintained by each service and Defense Department paymasters. The amount of monthly pay is determined by rules different from those for permanent disability.
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- The minimum payment is 50 percent of the appropriate retired pay base
- The maximum is 75 percent
- People receiving temporary disability retirement pay must undergo medical exams every 18 months. Within five years, doctors must determine whether the disability is permanent.
- Service members with at least 20 years of service and whose disability is deemed permanent are retired permanently in disability status. Depending on the circumstances, they may be returned to active duty or permanently separated with disability severance pay, unless the disability is 30 percent or greater.
- Those with limited disabilities may be retained by their service, depending upon individual circumstances.
Now when a member has less than 20 years service the rules get much more complicated. The gorverning rules and formulas to compute severance pay are here:
Disclaimer
As always remember that this site, although written by a retiree with substantial experience in the school of hard knocks, it is for personal, lay opinions and informational purposes only. If you have a legal question you should seek help from a legal professional. If you have questions involving current or future values of pensions you need an actuary or competent pension valuation expert. If your questions are tax-related, seek a competent tax advisor. In other cases, I recommend the base chaplain.
Related posts:
- Military Retirement — Special Six-Part Series — Part 3 — Disability Benefits
- Military Retirement — Special Six-Part Series
- Military Retirement — Special Six-Part Series
- Military Retirement — Special Six-Part Series — Part 2 — Death Benefits
- Military Retirement — Special Six-Part Series — Part 2 — Death Benefits
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