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Expansion of concurrent receipt proposed

The Obama administration has proposed to increased government payments to 103,000 disabled retirees over the next five years, marking the first time that the White House — not Congress — has led the effort to expand full concurrent receipt of military and veterans benefits to those eligible for both.

For the first three years, the proposal would apply to those who were medically retired with a disability with less than 20 years of service, a group left out of previous expansions of concurrent receipt. In the final two years, the proposal would apply to all disability retirees, regardless of years of service, whose disabilities are rated at less than 50 percent.

If approved by Congress, the plan will begin on Jan. 1, when about 12,000 veterans with veterans disability ratings of 90 percent or more and who receive military disability retired pay and veterans disability compensation would be allowed to concurrently receive both payments in full, with no offsets in military retired pay, said Gary McGee, the Defense Department’s assistant director for military compensation.

Other disability retirees with less than 20 years of service would be added to concurrent receipt through 2014, depending on their level of disability, with changes that take effect Jan. 1 of each year:

• Those with disabilities rated at 70 percent and 80 percent would be eligible in 2011.

• Those with disabilities rated at 50 percent and 60 percent would be eligible in 2012.

• All disability retirees, regardless of years of service, who have disabilities rated at 30 percent and 40 percent would be allowed to receive both payments in full in 2013. Disability retirees with 20 or more years of service who have disabilities rated at 50 percent or greater already receive full retired and disability pay.

• In 2014, the remaining disability retirees who are receiving veterans compensation and disability retired pay would be allowed to get both payments in full.

About 80,000 disability retirees will be helped in the first three years and about 23,000 in the last two years of the five-year plan, which would carry a $5.4 billion price tag over 10 years.

McGee cautioned that concurrent receipt for veterans with less than 20 years of service receiving disability retirement under Chapter 61 of the U.S. Code — different from regular military retirement — is complicated by a special rule that bases their benefits not on the retirement pay they are receiving from the military but on the level of regular retirement pay for their years of service.

Someone with only a few years of service and a high disability rating could end up receiving no more money after the change in law than they do today, and for some there will still be an offset, McGee said.

The Defense Finance and Accounting Service included an explanation of how to calculate concurrent receipt for Chapter 61 retirees in a March newsletter for retirees, which can be found online.

The concurrent receipt proposal is part of a larger omnibus package of legislation that the Defense Department is sending to Congress in hopes that it will be approved as part of the 2010 defense budget.

The House and Senate armed services committees are expected to begin preparing their version of the annual defense policy bill, the likely vehicle for the legislation, in June. As long as the defense budget includes money to cover the benefits, the proposal is unlikely to face opposition in Congress, according to congressional aides working on military personnel issues.