FACT SHEET
Concurrent Receipt of Military Retired Pay and VA Disability Compensation

Issue: Congress needs to fully eliminate the law that makes most disabled uniformed services retirees forfeit part or all of their military retired pay for VA disability compensation.

Background: For decades, MOAA has sought legislation providing full relief from the 19th century law that required a dollar-for-dollar offset of military retired pay for VA disability compensation. MOAA strongly believes retired pay is earned for a career of uniformed service, and VA disability compensation is recompense for pain, suffering, and lost future earning power due to service-connected disabilities.

After decades of effort, Congress finally approved a limited concurrent receipt provision in the FY 2003 defense bill that authorized Combat-Related Special Compensation (CRSC) for a small, yet significant, group of disabled retirees. Eligible retirees had to have 20 years of active service and either have a disability that resulted in a Purple Heart; or have a 60 percent to 100 percent disability from a combat/operations-related injury or illness. CRSC was payable June 1, 2003.

The FY 2005 Defense Authorization Act authorized immediate full concurrent receipt of retired pay and veterans' disability compensation for qualifying 100 percent disabled retirees. Most recently, the FY 2006 Defense Authorization Act accelerated the concurrent receipt phase-in for qualifying retirees rated 100 percent due to individual unemployability from Jan. 1, 2014 to Oct. 1, 2009. The phase-in will continue without change until Oct. 1, 2009 at which time the full amount of retired pay that is still offset by VA disability compensation will be reinstated.

In the 108th Congress, Rep. Jim Marshall (D-Ga.) sponsored a discharge petition to move Rep. Mike Bilirakis' (R-Fla.) H.R. 303 to the House floor for a vote. This pressure, combined with the Senate's defense bill provision calling for full concurrent receipt, led House leaders to persuade the administration to agree to provisions in the FY 2004 defense bill that expanded CRSC to all qualifying disability ratings and authorized a 10-year phase-in of concurrent receipt for retirees with 20 or more years of service, including Guard and Reserve retirees. The act also required establishment of a commission to review the VA disability system and report to Congress in 2005 on needed changes.

MOAA Position: MOAA remains committed to the goal of full concurrent receipt, including expansion of authority to include members with 40 percent or lower ratings, further rollback of the 10-year phase-in period, and inclusion of military disability retirees with less than 20 years of service.

Key Bills/Status: Several bills have been introduced in the 110th Congress. Congressman Gus Bilirakis (R-FL) has introduced H.R. 89, H.R. 303, and H.R. 1436; Congressman Jim Marshall (D-GA) has introduced H.R. 333; and Senator Harry Reid has introduced S. 439 (companion bill to H.R. 303).

H.R. 1436 permits certain retired members of the uniformed services who have a service-connected disability to receive both disability compensation from the Department of Veterans Affairs for their disability and either retired pay by reason of their years of military service or Combat-Related Special Compensation. This eliminates the phase-in period for retirees who are rated 100% due to unemployability.

H.R. 89 would extend eligibility for combat-related special compensation CRSC) to chapter 61 (disability) retirees with fewer than 20 years of service.

H.R. 303 and S. 439 would eliminate the 10-year phase-in period for retirees with a disability rating of 50%-90% and extends concurrent retirement and disability payments' (CRDP) eligibility to retirees rated less than 50%.

H.R. 333, called the "Disabled Veterans Tax Termination Act," includes the elements of H.R. 303/S. 439 and H.R. 89, and would also open CRDP to chapter 61 retirees with less than 20 years of service.

In MOAA's view, H.R. 333 is our ultimate concurrent receipt goal, though we likely will need to continue making incremental progress in getting there. MOAA is extremely grateful to these great champions for keeping the interests of disabled uniformed service retirees in the forefront. MOAA fully endorses these bills.

MOAA Fact Sheet 14 March 2007