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Tens of thousands of veterans forced from service short of 20 years because of combat-related injuries will be eligible for Combat-Related Special Compensation effective Jan. 1, 2008, under a compromise 2008 Defense authorization bill worked out by House and Senate conferees.

The CRSC payments would be set using the same formula as military retirement, usually 2.5 percent of base pay multiplied by years of service. CRSC would be paid on top of disability compensation, thus ending for these combat-injured the long time ban on “concurrent receipt.”

The size of the eligible population among so-called “Chapter 61” retirees was not immediately available but the projected cost of the combat-related program is $678 million over the next 10 years. Conferees rejected a more modest House plan, which would have restricted CRSC eligibility to the most seriously disabled who served at least 15 years.

The compromise Defense bill, which the full House and Senate are expected to pass before Congress adjourns Dec. 21, also endorses:

A $50-a-month “indemnity allowance” for survivors of disabled military retirees who see their Survivor Benefits Plan (SBP) annuities reduced each month by the amount they receive in tax-free Dependency and Indemnity Compensation from the Department of Veterans Affairs. DIC is payable if members die while on active duty or if retirees die from service-related conditions. The indemnity allowance might be perceived as a first step toward easing the ban on concurrent receipt for military widows. It would be increased to $100 a month by 2014.

Conferees rejected Senate language that would have restored full SPB annuities for DIC-eligible widows at a cost over 10 years of $8.9 billion. The compromise allowance will cost $477 million through 2016 when it will have to be reauthorized.

Retroactive plus up in concurrent receipt for retirees rated IU. These retirees, given “Individual Unemployability” status by the VA, draw disability compensation at the 100-percent level though their actual ratings are lower. The IU population, however, was excluded from full concurrent receipt benefits when they were granted to 100-percent rated disabled Jan. 1, 2005. Conferees accepted a Senate provision to grant IU retirees full concurrent receipt back to that date.

Time extended for using Reserve GI Bill. Reservists and National Guard personnel no longer will have to remain in drill status to use their educational benefits. They will have 10 years to use their benefits after separating from service. Those who already have left reserve status will be able to rejoin and reclaim their previously earned educational benefits and use them for 10 years following their subsequent separation.

Drug prices. To hold down drug costs for the Department of Defense, drug manufacturers will have to provide the same federal discounts on prescriptions filled through the Tricare retail network that they do for military base and VA hospital pharmacies.

Not approved by conferees was a Senate provision that would have moved forward by one year the effective date of an SBP paid-up premium rule for retirees age 70 and older who have paid premiums at least 30 years. The rule will not go into effect until Oct. 1, 2008.

For more on this legislation, go to To comment, e-mail, write Military Update, P.O. Box 231111, Centreville, VA 20120-1111, or visit


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