Military Update: Retro pay closing payment gap to disabled
Almost 75,000 military retirees with disabilities who were underpaid for months or even years after becoming eligible for one of two “concurrent receipt” programs have received their retroactive payments, officials in charge of the retro pay program say.
Approximately 33,000 pay files still need to be reviewed from a pool of 133,000 potential recipients, said Thomas J. Pamperin, deputy director of the compensation and pension service for the Department of Veterans Affairs. That review is expected to be completed by mid-November, according to the Defense Finance and Account Service.
The catch-up payments, necessary because of difficulties implementing the Combat-Related Special Compensation and Concurrent Retirement and Disability Pay programs, so far total close to $150 million. The average size of payments made by VA has climbed to $2,100, up from an average of $1,500 paid to the first 30,000 or so retro pay recipients last fall.
When all files have been reviewed, DFAS will turn its attention to a new pool of underpaid retirees. That second group of 12,000 to 16,000 retirees became eligible for CRSC or CRDP between the time the retro pay program began last summer and April of this year, when DFAS finally had computer programs in place to make accurate and timely concurrent receipt payments as retirees become eligible.
“This has proved to be an incredibly complex process for all involved,” said Pamperin, who leads a team of VA officials that has worked closely with DFAS on the retro pay program for two years.
Until CRSC began on June 1, 2003, and CRDP on Jan. 1, 2004, all military retirees with service-related disabilities had to accept a dollar-for-dollar reduction in taxable retired pay when they began to receive tax-free VA compensation for their service-related injury or illness.
Congress enacted CRSC to allow concurrent receipt for combat-related disabilities. It approved CRDP, under a phased schedule, to benefit retirees with service-related disabilities rated at least 50 percent disabling.
Most of the underpayments being corrected occurred when retirees eligible for CRDP or CRSC saw their VA disability rating raised. A higher rating means more VA compensation, and that higher amount is payable back to the date the retiree applied for reconsideration of his or her disability award.
Pay records of about half of all retirees drawing CRDP or CRSC are being reviewed but the total amount of retro payments needed is far below the $500 million figure initially projected.
The pay review process also is slower than was expected. Last year, DFAS officials predicted that all back payments would be made by the end of September 2007. The target is mid-November 2007. DFAS has the lead in reviewing pay records. VA is making most of the retro payments.
Through late August, Pamperin said, VA had paid 56,140 retirees a total of $119 million in back pay. DFAS, on behalf of the Department of Defense, had paid an additional $28 million to 17,000 retirees.
About one of every three pay records reviewed — 35,000 of nearly 100,000 files — shows no underpayment. That means many more retirees than projected have been properly compensated and will be getting no retro payments after all.
DFAS and VA officials notify retirees only if an underpayment is discovered.
Most of the remaining 33,000 files are CRSC recipients. Unlike CRDP, which involves an automatic payment, CRSC is paid only to retirees who apply for it. To do so, they must receive their VA disability rating and show that their disabilities are combat-related.
DFAS has set up a retro award hot line for retirees with questions about their entitlement to a back payment. The toll-free number is 877-327-4457. Customer service representatives are available at that number Monday through Friday from 8 a.m. to 4:30 p.m. Military retirees can also find periodic updates on the retro pay at DFAS Web site at: www.dfas.mil.
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