Last Updated on July 24, 2019
After being medically discharged or retired from the military, most soldiers are encouraged to also seek compensation from the Veterans Administration (VA). This process is just as confusing and drawn out as the process with the Army.
My husband submitted his packet to them at the same time that his medical packet was presented to the MEB. For months following that, we received letters every few weeks that basically stated ‘we haven’t forgotten about you but we’re swamped with cases that need to be reviewed’. We joked that if they spent as much time reviewing cases as they did sending those letters, their backlog may not be quite as large.
He went for his evaluation by the VA in the fall. During the evaluation with the VA, it is important to note that they do not go by what the Army has done. While that information can be added to your record, they conduct their own evaluations (there is talk of this being combined but as of this writing, it has not). Also, the VA evaluates everything that possibly could have happened to you during your time in the service. You are not limited to only filing for the disability that created your discharge or retirement. It’s also important to note that you do not have to be medically discharged or retired from the military in order to file with the VA. Their rating and compensation system is separate from the Army.
In December (eight months later), we received the letter in the mail that his rating had been established and he would begin receiving X amount per month in compensation. The kicker is that you cannot receive payments from the VA and the Army. Also the Army payments are taxable whereas the VA payments are not.
When we received this, the VA let the Army know of the decision as well. By doing this, it reduced the amount of pay received by the Army and he now receives a check from both the VA and the Army. If at some point, the VA quit paying him, then his Army check would revert back to the previous higher amount he was being paid. If for some reason the Army quits paying him, then his VA check will continue unless he is also reevaluated by them as well.
It’s easier to explain this with examples. These are not real numbers and are not based on true compensation. I just used round numbers to make it easier to explain.
Soldier is receiving $1000/month from the Army as retirement pay, which is taxable. The VA awards him $400/month, which is non taxable. The maximum amount he can receive is $1000. So from this point forward, he will receive two checks. He will receive a check from the Army for $600 before taxes ($1000 – $400) and he will receive a tax free check from the VA for $400 for a total of $1000. So now instead of paying taxes on $1000/month, he only pays taxes on $600/month. If for some reason, the VA discontinued their pay, he would begin receiving $1000 from the Army again. If the Army discontinued their pay, he would continue to receive $400 from the VA.
Soldier is receiving $1000/month from the Army as retirement pay, which is taxable. The VA awards him $1200 a month which is tax free. He will receive $0 pay from the Army and will receive a tax free check of $1200/month from the VA. If for some reason the VA discontinued his compensation, he would again receive $1000/month from the Army. If the VA reduced his compensation below $1000, it would play out the same as Scenario A
While permanent retirement pay from the Army is just that – permanent; VA compensation can change if you request another evaluation. This evaluation can result in your VA compensation remaining the same, increasing or decreasing. If the VA decides to change your compensation, it does not change your Army retirement pay as they are two separate systems. It will only effect it as described above in scenarios A & B.
There are some exceptions where soldiers are eligible to receive the full amount from the Army and the VA. This applies to soldiers who retired from time in service and have received a certain disability rating from the VA. It is referred to as Concurrent Retirement and Disability Payment (CRDP) Program.
Also, as with everything in the Army, there are exceptions to whether the medical retirement pay is subject to federal tax.
For more information, visit the VA’s website at www.va.gov.