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New groups of disabled retirees will be able this year to draw Combat-Related Special Compensation (CRSC) or higher amounts of Concurrent Retired Disability Payments (CRDP) under legislation passed last January.

Defense Finance and Accounting Service officials explained in an interview how they are implementing the changes. Again it will involve DFAS and the services screening thousands of disabled retiree files to determine millions of dollars in additional “concurrent receipt” payments.

For decades military retirees faced a legal ban on concurrent receipt of both military retirement and VA disability compensation. Retirees who received tax-free VA compensation for service-related disabilities saw their military retirement reduced dollar-for-dollar by the VA amounts.

Congress voted to end this offset for combat-related injuries in 2003 by approving CRSC. In effect, it restores the value of lost retired pay for broadly defined combat-related disabilities. Retirees have to apply to their service to establish CRSC eligibility.

A year later, lawmakers voted to phase out over 10 years the ban on concurrent receipt for retirees with disabilities rated 50 percent or higher, this time through a program called CRDP. Effective Jan. 1, 2005, Congress abandoned the phase in schedule for 100-percent disabled retirees and fully restored their retired pay with CRDP

Excluded, however, were retirees drawing 100-percent disability pay because they are rated “IU” or unemployable. These retirees continued to see retired pay restored only gradually under the phased payment schedule.

Two provisions of the fiscal 2008 defense authorization act signed in January again expanded CRDP and CRSC. Here are details on the changes and on how DFAS is implementing them:

FULL CRDP FOR ‘IU’ RETIREES — This fall about 50,000 IU retirees will see full retired pay restored through CRDP back to Jan. 1, 2005. This will occur in two steps, said Martha Smith, director of the DFAS site in Cleveland.

Nov. 3 paychecks to IU retirees will reflect full CRDP so they, in effect, will begin drawing full military retirement again on top of VA compensation. Sometime later – Smith can’t say when yet – IU retirees will get a lump sum payment for full CRDP back through Jan. 1, 2005.

“We will start processing as fast as we can to do retroactivity back to January of 2005. We’re looking at doing that very similar to the way we have done some of the VA retro stuff,” Smith said. “Try to do as many automated procedures as we can, to run those through as fast as possible.”

This “won’t be nearly as complicated” as the VA Retro Pay project, Smith added, under which DFAS needed two years to review a backlog of 133,000 cases potentially eligible for retroactive CRDP and CRSC.

DFAS plans to keep IU retirees informed initially through its website, As lump sum calculations of retroactive active payments begin after Nov. 3, she said, IU retirees will hear directly from DFAS.

“We are definitely going to be sending out letters that would state they are eligible, that we are working their case or that they should be receiving their payment within a certain amount of time,” Smith said.

CRSC FOR CHAPTER 61, TERA RETIREES — Veterans forced to retire because of disabilities before completing 20 years’ service for combat-related injuries now an apply for CRSC payable back to Jan. 1, 2008.

CRSC eligibility also has been extended for the first time to members with combat-related injuries who retired under Temporary Early Retirement Authority (TERA) from 1993 through 2001.

These two groups of disabled retirees will have to establish CRSC eligibility through their services. Payments are not automatic like CRDP for IU retirees.

Also, the Military Officers Association of America says it has found a glitch in the CRSC expansion law. It impacts some enlisted people with less than 14 years’ service who have high overall disability awards but low-rated combat-related disabilities. They will not be eligible for CRSC even though they currently forfeit any service-earned retired pay under the VA disability offset. MOAA has briefed congressional committees on a proposed fix.

Service CRSC offices are accepting applications from these new groups of eligible disabled retirees. The first approval notices were mailed last month. Smith said DFAS in July began to pay CRSC to its first four retirees with less than 20 years’ service. About 150 more Chapter 61 and TERA retirees will begin receiving CRSC in August.

Many disabled retirees with lower-rated disabilities from combat or combat training will not be eligible. Smith said 211,000 Chapter 61 retirees are eligible to apply. Only 15,000 to 18,000 are expected to be approved.

VA RETRO ‘NO PAY DUE’ CASES — Under pressure from Rep. Dennis Kucinich (D-Ohio), DFAS has agreed o review files of 25,448 CRSC and CRDP recipients who were notified, as part of the VA Retro Pay project, that they are not due any back payments.

During a recent subcommittee hearing, chaired by Kucinich, Zack E. Gaddy, director of DFAS, said a fresh look at “no pay due” cases is planned though Gaddy doesn’t expect it to uncover many errors.

He acknowledged that an error was made in the case of retired Army Command Sgt. Maj. Harold E. Lewis, who suffers from multiple disabilities from 28-year artillery career including service in Vietnam.

After Lewis challenged his “no pay due” letter, DFAS found computer software errors. Lewis actually was owed $15,000. Those early computer-based decisions were processed again using corrected software, Gaddy said. So DFAS believes few if any additional errors will be found.

To comment, e-mail, write to Military Update, P.O. Box 231111, Centreville, VA, 20120-1111 or visit:

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