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Can You Receive 100% VA Disability And Military Retirement Pay?

Last updated: October 19, 2023

Many veterans find it difficult to navigate the maze of benefits after service. With various entitlements like VA Disability Compensation and Military Retirement Pay, it's essential to understand how they work individually and in tandem. 

This article sheds light on these benefits, their eligibility requirements, and how they intersect.

What Is VA Disability And Military Retirement Pay?

VA Disability Compensation and Military Retirement Pay are two distinct benefits provided to veterans. While VA Disability Compensation is a tax-free benefit offered to veterans with service-connected disabilities, Military Retirement Pay is a taxable income provided to those who have served in the military for a specific duration.

  • VA Disability Compensation: To be eligible for this compensation, a veteran must have a service-connected disability. The amount of compensation depends on the severity of the disability and can range from a few hundred dollars to over $3,000 per month. For instance, if a veteran was injured in an IED explosion in Iraq, they would be eligible for this benefit. However, if the injury or ailment occurred after service, like a car crash, they would not be eligible.

  • Military Retirement Pay: This is handled by separate departments of the government. Currently, the U.S. military has two main retirement systems: The new Blended Retirement System (BRS) and the legacy High-3 system. The system under which a veteran falls depends on when they joined the military and whether they opted into the BRS. The BRS, which started in 2018, includes matching Thrift Savings Plan contributions, mid-career retention bonuses, and a monthly annuity for life after 20 years of service. The legacy system, also known as High-36 or "military retired pay," calculates the retirement benefit based on 2.5% times the highest 36 months of basic pay.

Can You Receive Both Benefits?

Yes, it is possible for a veteran to receive both VA Disability Compensation and Military Retirement Pay, but there are specific conditions to be met.

  • Concurrent Retirement And Disability Pay (CRDP): Veterans with a disability rating of 50% or higher can receive their full military retirement pay without any offsets. This is known as CRDP. Before 2004, veterans had to choose between VA compensation and retirement pay. However, with the introduction of CRDP, veterans no longer face this dilemma. If a veteran's disability rating is less than 50%, their pension will be reduced by the amount of their VA disability compensation unless they qualify for Combat Related Special Compensation (CRSC).

  • Combat Related Special Compensation (CRSC): This is another program designed to help veterans with combat-related disabilities receive more of their retirement pay. To qualify for CRSC, a veteran must be entitled to military retirement pay, have a VA disability rating of 10% or higher, and their retirement payment should currently be reduced by the amount of their VA disability pay. The definition of "combat-related" is broad, encompassing injuries from IED explosions, exposure to toxic chemicals, and even injuries sustained during training.

Eligibility Requirements

Before diving into the specifics of receiving both benefits, it's essential to understand the eligibility criteria. What are the prerequisites that veterans must meet? Let's break down the requirements.

Age Requirements For Reservists

While the provided content does not specifically address age requirements for reservists, it's commonly known that reservists must typically meet a minimum service requirement, often calculated in "points," to qualify for retirement benefits. The age at which they can start receiving these benefits without penalty is usually 60, but certain active service conditions, such as deployments in support of military operations, can reduce this age requirement.

Active Service Requirements

To be eligible for VA disability compensation, veterans must have served on active duty, active duty for training, or inactive duty training. Additionally, one of the following must be true:

  • The veteran got sick or injured while serving in the military and can link this condition to the illness or injury (known as an in-service disability claim).

  • The veteran had an illness or injury before joining the military, and serving made it worse (pre-service disability claim).

  • The veteran has a disability related to active-duty service that didn't appear until after service ended (post-service disability claim).

Combat-Related Disabilities Or Illnesses

Certain conditions are automatically presumed to be caused by military service, known as "presumptive conditions." For these conditions, veterans don't need to prove that their service caused the condition, only that they meet the service requirements for the presumption. Examples of these conditions include:

  • Chronic illnesses that appear within 1 year after discharge.

  • Illnesses caused by contact with contaminants or other hazardous materials.

  • Conditions resulting from time spent as a prisoner of war (POW).

Application Process

  1. Prepare Necessary Documents: Gather all relevant medical records and any other evidence that supports your claim for disability compensation.

  2. File A Claim: Submit your claim to the VA. This can be done individually or with the assistance of a Veterans Service Organization (VSO).

  3. VA Review: The VA will review the submitted medical records and any other provided evidence.

  4. Decision By The VA: After reviewing, the VA will make a decision regarding your claim.

  5. Receiving Benefits: If your claim is approved, you will begin receiving VA disability compensation benefits. This includes back pay for the duration it took the VA to process and make a decision on your claim.

  6. Appeal (If Necessary): If your claim is not approved, or if you believe the disability rating assigned is too low, you have the option to appeal the VA's decision. Follow the VA's guidelines for the appeal process.

Combined Disability Rating

Understanding the intricacies of the VA's disability rating system is crucial for veterans seeking compensation. This section delves into how these ratings are determined, especially when multiple disabilities are involved, and the implications they have on a veteran's benefits.

How Is The Rating Calculated?

The VA assigns disability ratings based on the severity of a veteran's service-connected condition. This rating is expressed as a percentage, representing how much the disability decreases a veteran's overall health and ability to function. When a veteran has multiple disabilities, the VA uses a method called the "whole person theory" to determine the combined disability rating. This ensures that the total VA disability rating doesn’t exceed 100%, as a person can't be more than 100% able-bodied.

The combined disability rating is calculated using the following steps:

  • Ranking Disabilities: Put your disability ratings in order, from highest to lowest percentage.

  • Using The Combined Ratings Table: Look for your highest rating in the left column and the next highest rating in the top row of the combined ratings table. The intersection of these two ratings provides the combined value of the two disabilities.

  • Rounding: If you have only two disabilities, round the combined value to the nearest 10%. Values ending in 1 to 4 are rounded down, and those ending in 5 to 9 are rounded up.

  • Additional Disabilities: If you have more than two disabilities, repeat the process for each additional disability. Take the combined value (before rounding) of the first two disability ratings and combine that with the third highest rating, and so on, until all disability ratings are added. The final value is then rounded to the nearest 10% to get your combined disability rating.

Maximum Combined Disability Rating Of 100%

The maximum combined disability rating a veteran can receive is 100%. However, reaching a 100% combined rating doesn't necessarily mean that each of the veteran's individual disabilities adds up to 100%. Due to the VA's unique calculation method, the sum of individual ratings can be greater than 100%, but the combined rating will never exceed this limit.

Dollar-For-Dollar Reduction Of Military Retirement Pay

While the provided content does not specifically address the dollar-for-dollar reduction of military retirement pay, it's known that before the implementation of Concurrent Retirement and Disability Pay (CRDP), veterans who received both military retirement pay and VA disability compensation experienced a dollar-for-dollar offset. This meant that their retirement pay was reduced by the amount of VA disability compensation they received. However, with CRDP, this offset has been eliminated for many veterans, especially those with a disability rating of 50% or higher.

Social Security Offsets For Dual Benefits Recipients

The provided content does not delve into the specifics of Social Security offsets for dual benefits recipients. However, it's worth noting that some veterans who receive both VA disability compensation and Social Security Disability Insurance (SSDI) might face offsets or reductions. It's essential for veterans to be aware of potential offsets and consult with the appropriate agencies or legal counsel to understand their specific situation.

Retroactive Payments

The U.S. Department of Veterans Affairs (VA) often faces delays in processing claims due to a backlog of VA disability claims. As a result, veterans might have to wait for months or even years to receive their benefits. However, there's a silver lining: VA disability compensation can be retroactive.

What Does Retroactive Mean?

Retroactive, or back pay, refers to the VA disability compensation that veterans are owed from the effective date of their claim. This means that the VA pays the full amount of benefits a veteran is owed from the date the claim was effectively filed, ensuring that veterans receive the compensation they deserve for the time they waited.

Effective Dates

The effective date plays a crucial role in determining retroactive payments. For a direct service connection, the effective date is either when the VA received the claim or the date the entitlement to the benefit arose. The VA uses this effective date to calculate the amount of retroactive disability payments a veteran should receive. Notably, there's no cap on the amount of back pay a veteran can receive.

If a veteran files their claim for VA disability benefits within one year after being discharged from the military, the effective date can be as early as the day after their discharge.

Incorrect Effective Dates

Sometimes, the VA might assign an incorrect effective date, leading to veterans receiving less back pay than they're entitled to. In such cases, it's crucial for veterans to challenge this decision to ensure they receive the appropriate amount of compensation.

Calculating Back Pay

The VA determines back pay using its historical compensation rate tables, which display the VA disability compensation amounts for each year. As the cost of living changes over time, so do VA disability benefits. The amount of back pay a veteran receives is directly proportional to their disability rating. Therefore, if the VA assigns an inappropriate rating, it can significantly impact the amount of back pay. Secondary disabilities, which are conditions caused or exacerbated by a service-connected disability, can also influence these ratings.

If a veteran's condition has deteriorated since filing their appeal, the VA will assign a staged rating. This method allows the VA to calculate each year of back pay in alignment with the progression of the veteran's condition over time.

How VA Lawyers Can Assist

VA lawyers can be instrumental in helping veterans navigate the complexities of the VA appeal process. They can assist in ensuring that veterans receive the correct effective date, appropriate disability rating, and consequently, the right amount of back pay. By understanding the nuances of each case, VA lawyers can prepare veterans for the appeal process and fight for their rights.

Understanding Your VA Disability And Military Retirement Pay

While it is possible to receive both VA Disability Compensation and Military Retirement Pay, the eligibility criteria and conditions vary. Veterans should be well-informed about their rights and the benefits they can avail to ensure they receive the compensation they deserve.

Our detailed guide will tell you everything you need to know about the VA disability increase. To learn more, visit Disability Help.

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Chloe Powers
Chloe works with policymakers on behalf of Disability Help to support their work at a strategic level, ensuring the conditions are in place for creative individuals and organizations to grow, reach their potential and effect relevant, sustainable change.
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