CRDP verses CRSC . . .

Greek to you, eh?  Those are terms, acronyms, used regarding military retirement pay and Veterans Administration (VA) compensation.  I am recompensed by both, military retirement and VA.  Military retirement is straight forward, it is a typical retirement system, so many years of service at such and such pay grade and you collect X dollars for that.  VA is a bit different but it is tax free money.

VA compensation is the result of disabilities incurred while serving on active duty.  In my case, I am 90% disabled by the VA's assessment.  The biggest contributor to that is Diabetes Type II (aka Diabetes Mellitus) as a result of exposure to the chemical named Agent Orange.  No, it was not orange colored, it was however shipped in orange barrels.  Hence that is where the name came from.  The primary damaging chemical is Dioxin.  It is a form of Dioxin that is very potent and will eventually get into your liver and stays there.  And it gradually causes Diabetes to occur.

Diabetes II in and off itself spawns other disabilities such as Peripheral Neuropathy (PN), that is nerve damage at the extremities of the hands and feet.  Diabetes attacks all kinds of nerves but that is the most common occurrence.  Well I have PN too.  Basically I am losing the ability to feel things with my feet and fingers.  Makes it hard to pick up tiny things like pills, pins, needles and the like.  In the case of feet one begins to lose one's stability and sometimes get other manifestations, such as tingling feet, itching and pain.  But the Diabetes is the basic culprit and it is a result of war time exposure.

War time based Service Connected disabilities are known as Combat Related Service Connected or CRSC disabilities.  They are included in the whole pile of disabilities referred to Compensation
retirement Disabilities Pay (CRDP).  This is important distinction.

Congress in its great generosity enacted laws regarding military retirement and VA disability compensation.  Originally, one could not collect both.  One could only collect his retirement or VA disability.  And one always elected to waive part of his retirement pay in the amount of the VA compensation to be able  collect the VA disability compensation.  Since all VA compensation is tax free from both federal and state income taxes, one usually waive the retirement pay amount.

It was recognized that was patently unfair, we military were essentially paying our own disability compensation.  So Congress changed the law but threw some hooks in.  First unless your were 50% or greater rated by the VA for disability you got nothing, nada, zilch.  You were stuck with the old process.  I started at 30% in 1989.  So I did the typical waiver, saved a few bucks but not having to pay tax on the VA money.  Yes, military retirement is all taxable unless you incur some kind of disability while on active duty.  I did not have such bad luck.

Then along came Diabetes and my total VA disability went to 6o%.  So now I was under this new legislation which had further hooks to it.  I could not collect all of the CRDP at first, it took a 10 year program to gradually get my CRDP to equal my VA compensation amount.  I have achieved that now. 

Then came another Congressional change.  CRSC could be collected at any VA disability rate and it was tax free in and of itself.  So each military service had to set up an office to assess all the VA disabilities and some of them were rated CRSC.  CRDP was known because it is equal to the VA compensation awarded. 

Congress also said one could not collect both CRSC and CRDP.  You could get one or the other not both or parts of both.  And since the CRRP by its nature was going to be greater percentage of the two, one elected to use the CRDP option.  Those few that had their disabilities turn out to be the same, that CRSC equals CRDP, well they went to the CRSC option because that amount was carved out of your retirement as tax free along with the VA compensation that was tax free.  The net was pay less taxes while not changing the net dollar amounts.  But unless the CRSC got close to the CRDP it was not cost effective.  And the Defense Finance Accounting Service (DFAS) does the calculations for you.

So the upshot is my CRSC numbers are 60% and CDRP numbers are 90%.  Ergo I opt for the CDRP option.

Times have changed.  I have developed Coronary Artery Disease which is an Agent Orange SC disability.  And that rating is 30% in and over itself.   That will raise my CRSC from 60% to a net of 70%.  DFAS needs to do another calculation and maybe, just maybe it will swing my way tax wise.

I don't think it will change but it is worth running the numbers.  We shall see just what happens.