Military Retirement — Special Six-Part Series — Part 4 — Combat related Special Compensation
Previous articles 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 six part series this week. Tune in often.
20-year retirement
Eligibility: Twenty years on active duty — or equivalent time spent in what is known as “qualifying service” as a reservist — is the basic eligibility requirement for military retirement. Every service member who reaches the requirement can receive retired pay that increases each year through a cost-of-living adjustment. Runs on Tuesday, 1 August:
Death benefits
Many benefits are provided for a retiring veteran, retired or not retired. All veterans and their families should know about them, and attorneys may need to know when it involves a client. Many divorce disagreements revolves around the smallest of issues. Scheduled to run 2 August
Disability benefits
An individual does not have to be retired from the military to receive disability benefits from the Department of Veterans Affairs. Scheduled to run 3 August.
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Combat related special compensation
The 2003 National Defense Authorization Act authorized the Combat Related Special Compensation payments (CRSC Program). This is brand new to many of us older “retreads, but very important. It’s an unfortunate fact of life that many divorces and other legal “life changing events” happen as a result of war and injuries. When a lawyer or other advisor needs to know these issues, he or she needs to know them cold. And old information can be very hurtful because many of these entitlements and benefits have changed a lot in recent years.
The 2003 National Defense Authorization Act authorized the Combat Related Special Compensation payments (CRSC Program), which became effective May 31, 2003, for qualified retirees with combat-related disabilities. Criteria for eligibility were expanded effective Jan. 1, 2004; to include members with any percentage combat related disability compensated by the VA.
Eligible members are those retirees who have 20 years of service for retired pay compensation (Prior to January 2004, reserve members needed 7,200 points to qualify. After January 2004, members needed 20 years of service creditable for reserve retirement at age 60.), and who have disabilities that are the direct result of:
· Armed conflict
· Specially hazardous military duty
· Training exercises that simulate war
· Or by an instrumentality of war
Such disabilities must be compensated by the VA and rated at least 10 percent disabling.
It’s important to note the big difference regarding reservists here. Under the old law, only reservist with 7200 points or more were eligible. In practical fact, this meant that nearly no one was eligible, because hardly any reservists or guardsmen ever accumulated 7200 points. This would be equivalent to 20 years of active duty and the individual would then be able to retire under regular retirement immediately. By far the most common scenario for reserve component personnel is that the member accumulates much less than 7200 points, completes 20 “good” years towards retirement and then is placed in the so-called “Gray Area’ to await his or her 60th birthday. I can see I had better write another post or two real soon on the reserve retirement system because it’s confusing and I get a lot of queries on the subject. Anyway.
For periods before Jan. 1, 2004, members had to have disabilities for which they were awarded a Purple Heart and are rated at least 10 percent disabled, or who are rated at least 60 percent disabled as a result of above combat-related injuries. This means in short that the compensation for a veteran inured after January 1st 2004 may be vastly different than one injured prior to that date.
CRSC benefits are equal to the amount of VA disability compensation offset from retired pay based on those disabilities. We’ll have a post on the offset provision real soon now too. It’s both interesting and complicated. CRSC payments are tax exempt.
This is an especially loaded area for potential recipients, their spouses and families. None of these entitlements and benefits are just handed out. The service components and the VA are not responsible to see that a service member applies; they are only responsible to act upon bonafide requests. It is the responsibility of the applicant to provide adequate, detailed documentation to show that the claimed disabilities are combat-related rather than service-related. Members must apply to their own branch of service using DD Form 2860 at the following addresses:
• Army: http://www.crsc.army.mil
• Navy and Marine Corp: http://www.hq.navy.mil/ncpb/CRSCB/combatrelated.htm
• Air Force: http://www.afpc.randolph.af.mil/disability/CRSC/CRSCnew.htm
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
- Military Retirement — Special Six-Part Series
- Military Retirement — Special Six-Part Series — Part 5 — Spouse Benefits
- Military Retirement — Special Six-Part Series — Part 3 — Disability Benefits
- Military Retirement — Special Six-Part Series — Part 3 — Disability Benefits
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