Open Season

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Defense Finance and Accounting Services (DFAS) has sent two letters thus far on the same topic, which required administrative support and costs. While it has yet to top the five letters I have received for single VA appointments, it is still redundancy. (The VA is also kind enough to leave automated phone messages with the date and time of appointments; unfortunately, those phone reminders are often a day late.)

The DFAS letters require the service member to elect either Combat Related Special Compensation (CRSC) or Concurrent Receipt Disability Payments (CRDP). The former is tax-free; the latter is not.

Both programs are for retired service members and both require service-connected disabilities. The CRSC program is for combat-related or realistically combat-incurred training injuries. CRDP is similar, but targeted for non-combat related disabilities. In effect, both programs enable retired service members to receive VA disability along with their military retirement pay.

Some questions which come to mind:

1. Why is CRDP taxed? It, after all, disability-based income. DVA disability is always untaxed, as is CRSC. As both CRDP and CRSC are both predicated on disability status, why would one be taxed and the other not?
2. Who would elect to pay taxes if they are eligible to receive CRSC?
3. Why does the Department of Defense incur costs of running these programs in a needlessly administratively complex manner? Once certified for a program, why impose the choice annually?

Ranger is appreciative of his CRSC payments and encourages all retired service members to apply for either of these programs. While administrative nightmares, the payoff is beneficial. If you did the time, get paid for it.