tdiu Retroactive Payments Of Combat-related Special Compensation (crsc)

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The following information comes from the 9th issue of the DFAS Retired Pay Newsletter which I got via email yesterday.

The Defense Finance and Accounting Service (DFAS) and the Department of Veterans Affairs (DVA) have finalized the plans to provide eligible retirees with their “complete” DoD military retirement entitlement to Combat-Related Special Compensation (CRSC) and/or Concurrent Retirement and Disability Pay (CRDP) and /or DVA disability compensation entitlement. Potential retroactive pay is due for more than 100,000 retiree accounts.

Individual amounts will vary based on differences in disability amount as well as the length of retroactive period. Retirees entitled to additional money from DFAS will receive notification by mail of the amount and a schedule of payment.

CRSC, which became effective in June 2003, provides non-taxable benefits to veterans who are disabled as a result of a combat injury. CRDP, effective in January 2004, provides taxable income to veterans who have become disabled while serving in the U.S. Armed Forces (not necessarily in combat). Surviving spouses or deceased retirees’ estates may also receive compensation.

The DFAS began initial payments in September 2006 and the DVA plans to begin payments in October 2006.

Individuals receiving a retroactive payment are those who are currently in receipt of either CRSC or CRDP and who have received an increase in DVA compensation since June 2003 for CSRC or January 2004 for CRDP, which was not offset from the retired pay entitlement on a current basis.

Completion of the majority of payments is expected within six months, and it could take up to six more months to calculate and pay the most complex retroactive pay accounts. The majority of payments are being made utilizing a manual process. Complex accounts involve multiple DVA rating adjustments since CRSC and CRDP began, shifts by retirees between these two types of payments, ex-spouse pay entitlements and any other issues that require lengthy record searches. DFAS plans on paying the accounts with the oldest retroactive dates first. In some instances, recipients may be entitled to additional compensation from the DVA. In such instances, the DVA is responsible for the payments and will notify the affected retirees.

The DFAS has established a toll free line that is operational from 8:00 to 4:30 (Eastern), Monday through Friday to address questions from CRSC and CRDP recipients who believe they might qualify. The toll free number is 1-877-327-4457.

QUICK FACTS

To be eligible, you must:

Ø Be a military retiree (Army, Navy, Air Force or Marine Corps)

Ø Meet all the requirements for either CRSC or CRDP eligibility

Ø Have received payment(s) of either CRSC on or after June 1, 2003; and/or

CRDP on or after January 1, 2004

Ø Awarded one or more increase in your percentage of disability by the VA on or after June 1, 2003

What will happen?

Ø Retirees need take no action to claim any funds.

Ø The DFAS and DVA will use existing records to identify recipients.

Ø Recipients will be notified by letter of additional funds due.

Ø Retirees may be eligible for payment from the DFAS as a restoration of retired pay or from DVA as a part of disability compensation.

Ø In cases where retirees are due money from the DFAS and DVA, DFAS will provide information to DVA as needed. Retirees need take no action.

When things will happen:

Ø The first DFAS retroactive payments were made in September 2006.

Ø The payment process could take up to a year, due to the large number of cases.

Ø Once all eligible retirees have been identified, a general schedule will be published on the DFAS web site.

Ø All retirees who may be eligible for additional money are expected to be identified by October 1, 2006.

VA RETRO AWARD FAQ’s

What do I need to do to receive my money? You do not have to do anything - no application is required. The Department of Veterans Affairs (DVA) is providing the Defense Finance and Accounting Service (DFAS) with eligible retirees’ Social Security Numbers (SSN’s). Both organizations are working together to provide eligible retirees with their full entitlements to both DVA compensation and Combat-Related Special Compensation (CRSC) or Concurrent Retirement and Disability Pay (CRDP).

When will I receive my payment? The DFAS is planning to pay the accounts with the oldest retroactive award dates first. We ask that you be patient with us during this time as the payments are calculated utilizing a manual process. The DFAS has however developed some automated tools to assist in computing the payment. Every effort is being made to pay as many accounts as rapidly as possible without sacrificing correctness. A letter will be sent out shortly before any payment is released.

Who will pay me the money I am owed? Any monies owed may be paid by either DVA or the DFAS depending on account specific calculations. Retirees may be eligible for payment from the DFAS as a restoration of retired pay and/or from DVA as a part of disability compensation. The letter you will receive will indicate which agency will be making the payment.

I am rated at 100% due to individual unemployability. Am I eligible for a retroactive payment? You can only receive a payment for 100% with individual unemployability if the award is applied retroactively by the DVA.

I disagree with my rating. What should I do? Disability percentages do not come from the DFAS. Disagreements in disability percentages should be directed to the DVA. You can contact the DVA by calling toll free 1-800-827-1000.

How do I contact the DVA for the money they owe me? Questions regarding any monies due to you from the DVA can be directed to their toll free number (listed in the answer of FAQ #5).

I received a letter in the mail from the DFAS but I never received the payment. What do I do now? If the letter indicated the payment was from the DVA, contact them by calling their toll free number. If the payment was from the DFAS, your payment was sent to the same address designated for your regular monthly payments. If your payment is delivered via electronic fund transfer (EFT) and it has not posted to your financial institution contact the DFAS telephone number contained in the letter you received. If your regular monthly payments are delivered via hard copy checks, please allow for mail times. If it has been at least 10 days since you received your letter and you still do not have your paper check follow the non-receipt procedures below:

· Write a letter including name, SSN, address, missing payment type, date and amount

· Fax the letter to (216) 522-5898 or mail to:

DFAS Cleveland

Attn: Non-Receipt Department

P.O. Box 998005

Cleveland, OH 44199

Is the retroactive payment taxable? Only payments made by the DFAS for CRDP are taxed. They will be taxed at the same rate as your normal monthly payment. If the VA retro payment was made by the DVA, please contact them using their toll free number for taxability information.

Will I receive a separate 1099R for this payment? No. If your payment was issued by the DFAS for an increase in CRDP as a result of a retro DVA award, the DFAS is responsible for withholding and reporting taxes on a Form 1099R. The taxable income will be included in your annual 1099R. If your payment is issued by the DVA, DFAS is not responsible for any tax reporting and will not issue an additional or revised Form 1099R.

Is the retroactive VA award pay subject to garnishment, former spouse, etc? If you receive CRSC, you are subject to alimony and child support. Since CRDP is a restoration of retired pay, the same rules that would apply to your retired pay would also apply here.

How can I contact the DFAS if I have questions? The DFAS has established a toll free line, which is operational from 8:00 to 4:30 (Eastern), Monday through Friday to answer questions from CRSC and CRDP recipients who believe they may qualify. The toll free number is 1-877-327-4457.