Concurrent receipt for medical retirees with less than 20 years of service

Since 07-05-05

From: Waspscpo@aol.com [mailto:Waspscpo@aol.com]
Sent: Saturday, July 02, 2005 4:46 AM
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Subject: Fwd: Concurrent receipt for medical retirees with less than 20 years of service


Subj: Concurrent receipt for medical retirees with less than 20 years of service
Date: 7/1/2005 6:51:34 PM Eastern Standard Time
From: p38bob@deepwell.com
Sent from the Internet (Details)

On Sun, 26 Jun 2005 07:10:29 -0400, Colonel Steve Strobridge USAF ret moaa.org> wrote:

Unfortunately, we're not as far along as we'd like.

The good news:

A. we've at least got a toehold, since Congress has approved providing concurrent receipt (but not combat-related special compensation for some weird reason!) for non-medical retirees forced to leave service with 15-19 years service during the drawdown. This should provide a precedent, along the lines of "if we're doing it for these guys, don't the medical retirees with similar service deserve equal treatment?"

B. we now have our House champion, Rep. Bilirakis, on board with a legislative proposal to expand combat-related special compensation to include medical retirees with less than 20.

the bad news: many in Congress and elsewhere still have a thing about the 20-year threshold and don't even like it that we got the folks covered in a. above (the language is a little obscure, so they didn't all realize this group would be covered). We beat on them and beat on them that it's not their fault that they didn't get to serve 20, and we're making some headway on education, but it's tough slogging.

I've just written an article on this issue to try to cast it in a little different light in hopes of trying to get the idea through doubters' skulls. I've attached the article, which we're also providing to the disability commission that's reviewing the concurrent receipt issue along with other VA concerns.

Cheers,

Steve Strobridge
Director, Government Relations
Military Officers Association of America

Steve also wrote As I See It - July online

All Disability Retirees Earned Concurrent Receipt

There are many inequities within the hodgepodge of various incremental concurrent receipt changes Congress has passed in recent years. But none compares with the refusal to consider equal treatment for military members whose service-connected disabilities forced them into medical retirement short of attaining 20 years of service.

These "Chapter 61" retirees (the chapter of law covering military disability retirement) are stuck with an outdated label that's now at odds with newly revised retired pay laws. Under the old concept, there were two kinds of retirements - longevity retirement and disability retirement. - and m Military records assign all retirees one label or the other. The fundamental concept of concurrent receipt has been is that retired pay is earned by longevity of service, and disability compensation is payment for reduced quality of life and loss of function and future earnings.

None of the original concurrent receipt legislation was intended to covered anyone who didn't have at leasthad less than 20 or more years of service. Why? Those with fewer years b By definition, they weren't eligible for longevity retirement. If they were retired earlier, it was for disability, not service Until the 20-year point, any retirement had to be for disability.

In the past, the concern the only practical issue was the pay level, not what it was called. Disability retirees were seen as receiving higher-value compensation. Their retired pay amount was their disability percentage times their basic pay - which usually exceeded the service-based formula of 2.5 percent times years of service and was tax-free as well.

But new concurrent receipt legislation raises has raised a couple of practical issues that demand we reconsider how we look at change the traditional view of disability retired pay. First, some members with more than 20 years of service are retired under Chapter 61, and their disability retired pay often exceeds the amount they would have earned by service alone.

In authorizing concurrent receipt for such members, Congress exempted from the VA disability offset only the amount of retired pay the member would have earned by service alone, independent of any disability. The rest of their retired pay was deemed disability compensation from DoD and remains subject to dollar-for-dollar offset for any VA disability compensation.

The principle logic behind this is that service-based retired pay is earned in its own right, but the member can't retirees shouldn't be able to claim disability compensation from both the military and the VA for the same disability. But By passing this law, Congress' key recognition in this new law is validated that part of what's called disability retired pay is, in fact, earned by service.

The second new reality is that some members are, in fact, now eligible for retired pay with 15 to 19 years of service, without any disability. These Temporary Early Retirement Authority (TERA) retirees were asked asked to take early retirement (usually under an implied threat of involuntary separation if they didn't) to help the services achieve rapid force reductions in the early to mid 1990s. Congress recognized these servicemembers' earned retired pay status by including them in the 10-year phase-in of concurrent receipt payments for those who also if they have incurred VA disability ratings of 50 percent or more. So some parts of military retirement law have been revolutionized, but others have some catching up to do.

Can we honestly say that a Chapter 61 retiree with 20 years of service earned part of his Chapter 61 retired pay by service, but one who was forced into medical retirement by a combat or other disability with 19 years and 11 months didn't? Can we say that a 20-year retiree with a 10-percent combat disability deserves relief from the disability offset, but one with 19 years and 11 months of service and a 100 percent combat-related disability rating doesn't? Can we assert with integrity that a TERA retiree with 15 to 19 years of service earned his retired pay, but a military member forced by a severe service-connected condition into medical retirement with 15 to 19 years didn't earn it?

The answer to all three questions clearly is a resounding "no."

What we have here is a vesting issue. Normally, military retirement vests at 20 years for good reason. With unique military conditions of service, the strong "pull to 20" is needed. If service members could take part of their retired pay with them at 10, 12, or 14 years, the pull to 20 would be much weaker, and we'd have many more people leaving service rather than take an unattractive assignment, third or fourth deployment, etcetera.

The trade-off for 20-year vesting is the ability to retire with an immediate annuity, lifetime health coverage, and other benefits after 20 or more years of service.

But the pull to 20 is irrelevant when a service member is forced into retirement by a service-caused medical condition. In such cases, the member is vested in retired pay, and part of that retired pay is for service rendered. It's not just for the disability.

How much should be vested as service-earned retired pay and therefore not subject to offset for VA disability compensation? The MOAA's answer: the same proportion that's already is established in law for Chapter 61 retirees with more than 20 years of service - 2.5 percent of the applicable basic pay base times years of service. A Under that formula, a person with 15 years of service would be vested at three-fourths the amount of the 20-year member, with proportionally less for shorter service.

Should there be a minimum level of service for military members to be considered vested if a service-connected disability forces them into involuntary medical retirement? In the civilian world, the normal standard is five years - by which time most military members will have served past their initial active duty commitment.

So whether we call the issue "concurrent receipt," "the disabled veterans tax," or any other term, the fundamental concept is one of vesting. Military retired pay is earned by service, and it should be vested, proportional to service rendered, for members forced into medical retirement by disabilities incurred while serving their country.