New law widens combat pay scope

New law widens combat pay scope

By Tom Philpott, Heraldnet.com

New groups of disabled retirees will be able this year to draw Combat-Related Special Compensation or higher amounts of Concurrent Retired Disability Payments under legislation passed in January.

Defense Finance and Accounting Service officials explained in an interview how they are implementing the changes. Again it will involve the services screening thousands of disabled retiree files to determine millions of dollars in additional "concurrent receipt" payments.

For decades, military retirees faced a legal ban on receiving both military retirement and VA disability compensation at the same time. Retirees who received tax-free VA compensation for service-related disabilities saw their military retirement reduced.

Congress voted to end this offset for combat-related injuries in 2003 by approving combat-related compensation. In effect, it restores the value of lost retired pay for broadly defined combat-related disabilities. Retirees must apply to their service to establish eligibility.

A year later, lawmakers voted to phase out in the course of 10 years the ban on concurrent receipt for retirees with disabilities rated 50 percent or higher. Effective Jan. 1, 2005, Congress abandoned the phase-in schedule for 100 percent disabled retirees and fully restored their retired pay.

Excluded, however, were retirees drawing 100 percent disability pay because they are rated "IU," or unemployable. These retirees continued to see retired pay restored only gradually under the phased payment schedule.

Two provisions of the fiscal 2008 defense authorization act signed in January again expanded the special compensation programs. Here are details on the changes and on how the services are implementing them:

Full Concurrent Retired Disability Payments for IU retirees: About 50,000 IU retirees will see full retired pay restored to Jan. 1, 2005. This will occur in two steps. The military plans to keep IU retirees informed initially online at www.dfas.mil.

Combat-Related Special Compensation for Chapter 61, TERA retirees: Veterans forced to retire because of disabilities before completing 20 years’ service for combat-related injuries now can apply for special compensation payable to Jan. 1, 2008. Eligibility also was extended for the first time to members with combat-related injuries who retired under Temporary Early Retirement Authority from 1993 through 2001. These two groups of disabled retirees will have to establish eligibility through their services. Payments are not automatic, as they are for IU retirees.

Also, the Military Officers Association of America says it has found a glitch in the special compensation expansion law. It affects some enlisted people with less than 14 years’ service who have high overall disability awards but low-rated combat-related disabilities. They will not be eligible even though they currently forfeit any service-earned retired pay under the VA disability offset. A proposed fix could find its way to Congress soon.

VA retro ‘no pay due’ cases: Under pressure from Rep. Dennis Kucinich, D-Ohio, the Defense Finance and Accounting Service has agreed to review files of 25,448 special compensation recipients who were notified, as part of the VA Retro Pay project, that they are not due any back payments.

During a recent hearing, Zack Gaddy, Defense Finance and Accounting Service, said a fresh look at "no pay due" cases is planned, though Gaddy doesn’t expect it to uncover many errors.

He acknowledged an error was made in the case of retired Army Command Sgt. Maj. Harold Lewis, who suffers from multiple disabilities from 28-year artillery career including service in Vietnam.

After Lewis challenged his "no pay due" letter, the military found computer software errors. Lewis actually was owed $15,000. Those early computer-based decisions were processed again using corrected software, Gaddy said. So his agency believes few, if any, additional errors will be found.