More About CR for Just Thinking

Ahoy Just Thinking -

Here is more info (probably more than you want) on Concurrent Receipt. Note there are a couple of links to get more info as well as a phone number to call and ask your specific question at the end.

- SB

President Bush signed H.R. 1588, the National Defense Authorization Act for Fiscal Year 2004, on November 24, 2003. Section 641 of the Act approves the phase-in of full concurrent receipt of military retired pay and veterans disability compensation for certain military retirees. Member’s veterans’ disability compensation must have been rated at 50 percent or higher to be eligible. In general, this change authorizes “a member of the uniformed services who is entitled for any month to retired pay and who is also entitled for that month to veterans’ disability compensation for a qualifying service-connected disability is entitled to be paid both for that month without regard to Sections 5304 and 5305 of Title 38, U.S. Code. The phase-in begins January 1, 2004 and ends on December 31, 2013. H.R. 1588 also repealed Section 1413, Title 10, U.S. Code, which was the Special Compensation for Certain Severely Disabled Uniformed Services Retirees. The staff at PSC is currently working on systems programming and procedures, while awaiting formal policy from Coast Guard Headquarters on implementation of this legislation. PSC (RAS) will periodically update this posting to include more FAQs, and updates. In the meantime, this posting is intended to offer current state. Questions and/or suggestions regarding this information should be addressed to PSC-RAS, by email



The term “current baseline offset” as used below means:



The amount for any month that is the lesser of (a) the amount of the applicable monthly retired pay of the qualified retiree for that month; and (b) the amount of monthly veterans’ disability compensation to which the qualified retiree is entitled for that month.



During calendar year 2004, the amount of retired pay payable to a qualified retiree is the amount (if any) of retired pay in excess of the current baseline offset plus the following:



For a month for which the retiree receives VA compensation rated as 100%, $750.
For a month for which the retiree receives VA compensation rated as 90%, $500.
For a month for which the retiree receives VA compensation rated as 80%, $350.
For a month for which the retiree receives VA compensation rated as 70%, $250.
For a month for which the retiree receives VA compensation rated as 60%, $125.
For a month for which the retiree receives VA compensation rated as 50%, $100.


A few examples of Concurrent Receipt are provided below:



1. A member who is rated 80% VA compensation and the gross pay is less than VA compensation. Member’s gross pay is $1,217.00, VA compensation is $1,343.00. The amount of concurrent receipt the member will receive is $350.00 based on the 80% rating. In the below examples, the full Retired Pay entry on the first line is shown to show what current retired pay would be if not offset. The conc receipt line is used to reflect the portion of Retired Pay currently paid or to be paid in future years. All entries are for illustration purposes only, as the annual Cost Of Living Allowance (COLA) increases, if any, would be applied to Retired Pay and VA Comp entries for subsequent years beyond 2004. The example does show the 2004 COLA applied, but not for succeeding years.



Total monthly entitlements due member:

Year:
2003

2004

2014

Retired Pay
$1217.00 ($0)
Retired Pay
$1242.00 ($0)
Retired Pay
$1242.00 ($0)

VA Comp
$1343.00
VA Comp
$1371.00
VA Comp
$1371.00

Conc receipt
$.00
Conc receipt
$350.00
Conc receipt
$1242.00

Total fm all
$1343.00
Total fm all
$1721.00
Total fm all
$2613.00




2. A member who is rated 100% VA compensation and the gross pay is more than VA compensation. Member’s gross pay is $3,649.00, VA compensation is $2,734.00. The amount of concurrent receipt the member will receive is $750.00 based on the 100% rating.



Total monthly entitlements due member:

Year 2003

2004

2014

Full Retired Pay $3649.00 Full Retired Pay $3725.00 Full Retired Pay $3725.00
VA Comp
$2734.00
VA Comp
$2791.00
VA Comp
$2791.00

Retired Pay Paid
$915.00
Retired Pay Paid
$934.00
Retired Pay Paid
$3725.00

Severely Dis Comp
$325.00
Severely Dis Comp
$0.00
Severely Dis Comp
$0.00

Conc receipt
$.00
Conc receipt
$750.00
Conc receipt
$3725.00

Total fm all
$3974.00
Total fm all
$4475.00
Total fm all
$6516.00




The amounts will be recalculated and increased by 10% of the remaining residual amount each succeeding calendar year, until full implementation on January 1, 2014. The Military Officers Association has created charts which will prove useful in understanding the phase-in period. Please see their link at www.moaa.org/legislative/retirement/crcharts/



A person who is a qualified retiree under the above guidelines and is also an eligible combat-related special compensation (CRSC) disabled uniformed services retiree may receive special compensation in accordance with the CRSC law or retired pay in accordance with above guidelines, but not both. These personnel shall be afforded an annual period (referred to as an “open season”) during which a person shall have the right to make an election to change from receipt of CRSC to receipt of retired pay, or the reverse, as the case may be. Those procedures are still being formalized.



The following are a series of anticipated Frequently Asked Questions (FAQ) to assist in educating retired personnel on eligibility and expectations. If you have other questions, please click on the e-mail link to PSC-RAS, and your concern will be answered as soon as possible. e-Mail PSC-RAS



Question - What does “qualifying service-connected disability” mean for this legislative change?



Answer - This term means a service-connected disability or combination of service-connected disabilities that is rated at 50 percent or higher disabling by the Secretary of Veterans Affairs.



Question - Who is eligible?



Answer - Any Regular, Reserve, or Disability retiree with at least 20 years of creditable service that has been rated 50 percent or higher by the Department of Veterans Affairs.



Question - Who is not eligible?



Answer - Any retirees with less than 20 years of creditable service at time of member’s retirement. This eliminates the retirees under the Temporary special retirement qualification authority (aka TERA retirees) who retired with at least 15 years but less than 20 years of service, and those retired by reason of disability with less than 20 years of service.



Question – What if I retire under the TERA law with 15 years of service and complete my additional 5 years of public service. Do I qualify once I complete the additional time?



Answer – No, the law states that you must have 20 years of service at the time of retirement.



Question – If I meet the concurrent receipt eligibility requirements, what do I have to do?



Answer - Nothing, unless you are also eligible or feel you are eligible to apply for the Combat-Related Special Compensation (CRSC). As discussed previously, the CRSC procedures are still being formalized.



Question - When can I expect the offset of my retired pay to be reduced and receive retired pay payment, which was previously offset?



Answer – Current eligible retirees should expect payment the first payment date following implementation, which will be on February 2, 2004 (as that is the first pay date following the January 1st implementation.) PSC staff are working diligently to ensure minimal disruptions to retiree’s authorized payments.



Question - I was previously receiving the Special Compensation for Certain Severely Disabled Uniformed Services Retirees (SCCSDUSR). With the repeal of that law, what do I need to do?



Answer - You won’t need to do anything, unless you plan to apply for the Combat Related Special Compensation (discussed above.) You’ll receive your final SCCSDUSR payment dated January 2, 2004 on or about that same day. Then PSC (RAS) will reduce the offset of your retired pay, effective for payment of February 2, 2004. The PSC staff understands that many of the retirees are currently receiving the SCCSDUSR payments, and the negative impact to retirees’ financial condition if anywhere from $50 to $325 suddenly disappear without the concurrent receipt being started. We are working diligently to ensure this does not occur.



Question – What, if anything, will I have to do in future years to receive the remaining 10% residual increases each year until full implementation of concurrent receipt?



Answer – Nothing. PCS (RAS) will complete the recalculations each succeeding year until full implementation in 2014.



Question - Is the payment of my retired pay taxable?



Answer - The taxability is based on whether your retired pay was previously considered taxable or not. Remember, this legislation is only impacting the offset previously being withheld from your retired pay.



Question – I am a Reserve retiree. Must I have a certain number of retirement points to be eligible for concurrent receipt?



Answer – No, however the 7,200 points are still required for eligibility under the CRSC program.



Question – I am currently making direct payments to the Veterans Administration for Survivor Benefit Plan (SBP) coverage, as my VA compensation exceeded my available retired pay. Is there anything I need to do?



Answer – If the amount of retired pay being paid concurrently will exceed the difference between VA compensation and payment of retired pay, you must elect to have PSC (RAS) withhold SBP deductions from your available pay and terminate the payment arrangements you had with the VA.



Question - Will this affect my Former Spouse Protection Act (FPSA) payments?



Answer - This depends on how the divorce decree/property settlement agreement was written. PSC (RAS) is reviewing FSPA accounts as part of our annual verifications for COLA increases, and will determine which accounts will be affected in January 2004 and make adjustments accordingly. No action should be required by the retiree or the former spouse, however correspondence will be sent to both parties should a change be made.



Question - Currently the Cost Of Living Allowance (COLA) increases are applied uniformly for retired pay. Will the COLA increases remain the same?



Answer – The legislation did not specifically address COLA increases, however we assume they’ll continue to be applied uniformly.



Question – What if my specific question/concern is not shown?



Answer – Please contact PSC-RAS by email, or call us at 1 800 772-8724. We will be adding new questions and answers, as well as clarifying or updating any of the above questions and/or answers as needed.