Understanding Changes to Military Retirement and Disability Pay for Veterans
Are you a veteran trying to navigate the complexities of military retirement and disability pay? The recent changes to military retirement and disability pay have left many veterans confused and uncertain about their financial futures. These adjustments, while intended to modernize the system, can significantly impact your benefits. Will these changes ultimately benefit or disadvantage veterans?
Key Takeaways
- The Blended Retirement System (BRS), effective since 2018, now impacts many veterans entering retirement, offering a mix of traditional and defined contribution benefits.
- Concurrent Receipt, allowing veterans to receive both retirement and disability pay, has expanded, but strict eligibility requirements still apply.
- Changes to disability ratings and the appeals process at the Department of Veterans Affairs (VA) can significantly affect monthly compensation amounts.
The Blended Retirement System (BRS): A New Era
The most significant shift in recent years has been the implementation and increasing prevalence of the Blended Retirement System (BRS). This system, which went into effect on January 1, 2018, fundamentally alters how service members accrue retirement benefits. Unlike the legacy retirement system that required 20 years of service to receive any retirement pay, the BRS combines a reduced defined benefit (pension) with a defined contribution component (Thrift Savings Plan, or TSP).
Under the BRS, the government automatically contributes 1% of a service member’s basic pay to their TSP account, and will match up to an additional 4% based on the service member’s contributions. This is a major benefit, especially for those who don’t serve a full 20 years. The defined benefit portion is calculated at 2.0% per year of service, rather than the 2.5% under the legacy system.
I had a client last year, a former Army sergeant who served 12 years. He was initially disappointed when he learned about the lower multiplier under the BRS. However, after running the numbers and factoring in the compounded growth of his TSP contributions over time, he realized the BRS offered him a more substantial retirement nest egg than he would have had under the old system, especially considering he didn’t reach the 20-year mark.
Concurrent Receipt: Receiving Both Retirement and Disability Pay
One of the most welcome changes for veterans has been the expansion of Concurrent Receipt, which allows eligible veterans to receive both military retirement pay and VA disability compensation. Previously, many veterans faced a reduction in their retirement pay if they also received disability compensation. If you are seeking to understand your VA benefits, a how-to guide can be beneficial.
The rules around Concurrent Receipt can be complex. The two main programs are Concurrent Retirement and Disability Payments (CRDP) and Combat-Related Special Compensation (CRSC). CRDP gradually restores retirement pay that was previously offset by disability payments. CRSC, on the other hand, provides compensation for disabilities that are directly related to combat. The specific eligibility requirements and amounts vary depending on factors such as disability rating, years of service, and the nature of the disability. According to the Department of Defense [website](https://www.defense.gov/News/Feature-Stories/story/article/2059988/concurrent-receipt/), CRDP eligibility depends on retirement status (length of service or disability retirement) and disability rating (generally 50% or higher).
There is a lot of confusion surrounding Concurrent Receipt. Many veterans mistakenly believe that all veterans receiving disability compensation automatically qualify for full concurrent receipt. This is simply not true. A veteran must meet specific criteria, and the amount of concurrent receipt can be phased in over time.
Navigating VA Disability Ratings and Appeals
Changes to the VA’s disability rating system and appeals process can have a significant impact on veterans’ monthly compensation. The VA uses a complex system to assign disability ratings, which are based on the severity of the service-connected disability. These ratings directly influence the amount of monthly compensation a veteran receives. Considering recent VA policy changes, it is more important than ever to stay informed.
Recent changes have focused on streamlining the appeals process, aiming to reduce the backlog of cases and provide veterans with faster decisions. The Appeals Modernization Act (AMA), implemented in 2019, introduced three different appeal lanes: Supplemental Claim, Higher-Level Review, and Board Appeal. Each lane offers a different avenue for appealing a VA decision.
Here’s what nobody tells you: even with these changes, the appeals process can still be lengthy and frustrating. The VA is currently facing significant backlogs, and it can take months, even years, to receive a decision on an appeal.
Case Study: BRS and Disability in Action
Let’s consider a hypothetical case: Sergeant Major Johnson, a veteran who served 18 years and opted into the BRS. He retires in 2026 with a high-3 average salary of $70,000. He also receives a 70% disability rating from the VA for injuries sustained during his service.
Under the BRS, his retirement pay is calculated as follows: 2.0% x 18 years x $70,000 = $25,200 per year. In addition, he has accumulated $120,000 in his TSP account, thanks to his contributions and the government match. He also receives monthly disability compensation from the VA. According to the 2026 VA compensation rates [provided by the VA](https://www.benefits.va.gov/compensation/rates-veteran.asp), a veteran with a 70% disability rating and no dependents receives $1,770.84 per month.
Because his disability rating is above 50%, he is eligible for Concurrent Retirement and Disability Payments (CRDP). This means he can receive both his retirement pay and his disability compensation, without a reduction in either. This is a significant financial benefit for Sergeant Major Johnson, providing him with a stable income stream in retirement.
We ran into this exact issue at my previous firm. A client was convinced he was being shortchanged because he thought his disability payments should not affect his retirement, even though he was not eligible for CRDP. It took careful explanation and a review of his service record to demonstrate how the calculations worked.
Seeking Expert Guidance
Navigating the changes to military retirement and disability pay can be overwhelming. It is essential to seek guidance from qualified professionals who understand the intricacies of these systems. This might involve consulting with a financial advisor specializing in military retirement, a veterans service organization (VSO), or an attorney experienced in VA disability claims. To master your finances after service, seeking expert help is often a great first step.
There are many resources available to veterans seeking assistance with their benefits. The Department of Veterans Affairs [offers a wide range of services](https://www.va.gov/benefits/), including benefits counseling, claims assistance, and appeals support. Veterans Service Organizations (VSOs) such as the American Legion and the Disabled American Veterans (DAV) provide free assistance to veterans navigating the VA system.
The Georgia Department of Veterans Service is also a valuable resource for veterans in Georgia. They can provide information and assistance with state-level benefits, as well as federal benefits. Their offices are located throughout the state, including one near the Fulton County courthouse in downtown Atlanta.
Understanding these changes to military retirement and disability pay is paramount for veterans seeking to secure their financial future. Take the time to educate yourself, seek expert guidance, and ensure you are receiving all the benefits you are entitled to. And if you’re looking to be sure about your benefits, start researching now.
What is the Blended Retirement System (BRS)?
The BRS is a retirement system that combines a reduced defined benefit (pension) with a defined contribution component (Thrift Savings Plan, or TSP). It applies to service members who entered the military on or after January 1, 2018, and those who opted into it.
Who is eligible for Concurrent Retirement and Disability Payments (CRDP)?
Generally, veterans with a disability rating of 50% or higher and who are also receiving military retirement pay are eligible for CRDP. However, specific eligibility requirements can vary depending on factors such as years of service and the nature of the disability.
How does the Appeals Modernization Act (AMA) affect VA disability appeals?
The AMA, implemented in 2019, introduced three different appeal lanes: Supplemental Claim, Higher-Level Review, and Board Appeal. This aims to streamline the appeals process and provide veterans with more options for appealing VA decisions.
Where can I find information about VA disability compensation rates?
You can find the most up-to-date VA disability compensation rates on the Department of Veterans Affairs website.
What resources are available to help veterans navigate these changes?
The Department of Veterans Affairs, Veterans Service Organizations (VSOs), and qualified financial advisors specializing in military retirement can provide assistance. The Georgia Department of Veterans Service is also a valuable resource for veterans in Georgia.
It’s important to remember that these systems are complex and ever-changing. Don’t wait until it’s too late; take proactive steps now to understand your benefits and plan for a secure future. Start by contacting a Veterans Service Officer in your area for a personalized benefits review. If you’re considering if AI will guide veterans with their VA benefits, stay tuned to new developments.
