Contents

• Introduction
• Military Retirement and VA Disability Compensation
• Military Retirement
• Reserve Retirement
• Disability Retirement
• Temporary Early Retirement Authority
• VA Disability Compensation
• Interaction of DOD and VA Disability Benefits
• Combat-Related Special Compensation
• CRSC for Military Disability (Chapter 61) and TERA Retirees
• The Special Rule for Disability Retirees
• CRSC for Reserve Retirees
• CRSC Eligibility Summary
• Concurrent Retirement and Disability Payments
• CRDP for TERA Retirees
• Concurrent Receipt and Blended Retirement System Lump Sum Payments
• CRSC and CRDP Comparisons and Costs
• Funding
• Other Compensation for Injuries or Deaths Related to Military Service
• Claims Brought by Veterans (Unrelated to Military Service)
• Claims Incident to Military Service
• Other Options for Congress
• Eliminate or Sunset Concurrent Receipt Programs
• Allow Concurrent Receipt for Combat-related Disabilities Only
• Extend CRDP to All Chapter 61 Disability Retirees
• Modify or Eliminate the Special Rule
• Split Compensation by Agency for Longevity and Disability
• Extend CRDP to Those with a 40% or Less VA Disability Rating
• Consider Interactions with other Federal Benefits
• Modify Concurrent Receipt Normal Cost Responsibilities

Summary

Concurrent receipt is the term used to describe the simultaneous receipt of two types of federal monetary benefits. In the military context, this often describes the simultaneous receipt of military retired pay from the Department of Defense (DOD) and disability compensation from the Department of Veterans Affairs (VA). Prior to 2004, federal laws and regulations dictated that a military retiree could not receive two payments from federal agencies for the same purpose; military retired pay and VA disability compensation were considered to fall under that restriction. As a result, military retirees with physical disabilities recognized by VA had their (taxable) military retired pay offset, or reduced dollar-for-dollar, by the amount of their (nontaxable) VA compensation. Legislative activity on the issue of concurrent receipt began in the late 1980s and led to a provision for Combat-Related Special Compensation (CRSC) in the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (P.L. 107-314). Since then, Congress has added Concurrent Retirement and Disability Payments (CRDP) for those retirees with a disability rated at 50% or greater, extended concurrent receipt to additional eligible populations, and further refined and clarified the authorities for concurrent receipt benefits.

Concurrent receipt is applicable only to persons who are eligible for both (1) military retired pay and (2) VA disability compensation. An eligible retiree may not receive both CRDP and CRSC simultaneously. The retiree may choose whichever is most financially advantageous to him or her and may make benefit changes during an annual open season.

As of September 2022, about 47% (894,614) of all military retirees were receiving either CRSC or CRDP at the cost of about $21 billion annually. There are also military retirees who receive VA disability compensation that are not eligible for concurrent receipt. Determining whether to make some or all of this population eligible for concurrent receipt has been a subject of congressional debate.

Costs of concurrent receipt benefits have been increasing, which the Department of Defense (DOD) Actuary has attributed, in part, to increased incentives for servicemembers to apply for the benefits, broader definitions of disability and higher disability ratings by the VA, and higher incidence of combat-related disability from recent conflicts. DOD pays part of military retirement costs through annual contributions to the military retirement fund as part of the appropriations process, but Treasury is responsible for paying the normal costs of concurrent receipt benefits. The DOD Actuary has encouraged policymakers to revisit concurrent receipt funding rules.

Introduction

Concurrent receipt is a term used to reference the simultaneous receipt of two or more federal monetary benefits for the same period of service or qualifying event. Congress has authorized two forms of concurrent receipt for military retirees: Concurrent Retirement and Disability Payments (CRDP, under 10 U.S.C. §1414) and Combat-Related Special Compensation (CRSC, 10 U.S.C. §1413a). CRDP authorizes qualified military retirees to simultaneously receive both retired pay from the Department of Defense (DOD) and disability compensation from the Department of Veterans Affairs (VA) without offset. CRSC allows qualified military retirees with combat-related injuries to receive a "special pay" from DOD that can be received concurrently with retired pay and disability compensation. Servicemembers may receive either CRDP or CRSC, but not both. Several military and veteran service organizations have advocated for expansion of this benefit and it has been an area of interest for congressional Armed Services and Veterans Affairs committees, as well as some Member offices.

Military Retirement and VA Disability Compensation

An understanding of military retired pay, VA disability compensation, and the interaction of these two benefits is helpful when discussing concurrent receipt. This section outlines these concepts.

Military Retirement

An active-duty servicemember typically becomes entitled to retired pay, an event frequently referred to as vesting, upon completion of 20 years of service, regardless of age. Retirement for longevity is typically referred to as a regular or non-disability retirement. A retired servicemember is immediately paid a monthly annuity based on a percentage of their final base pay or the average of their high three years of base pay, depending on when they entered active duty.¹ Retired pay accrues at a rate of 2.5% per year of service for those who entered service prior to January 1, 2018, and 2.0% for those who entered service on or after that date.²

Reserve Retirement

Reserve component servicemembers become eligible for retirement upon completion of 20 years of qualifying service, regardless of age. However, their retired pay calculation is based on a point system that results in a number of equivalent years of service.³ In addition, a reserve component retiree does not usually begin receiving retired pay until reaching age 60.⁴ Those reservists who retire from service but do not yet receive retired pay are sometimes called gray-area retirees.

Disability Retirement

While members of the active component are generally eligible for retired pay at 20 years of qualifying service and reserve component members at age 60, earlier eligibility is possible under some circumstances. Servicemembers found to be unfit for continued service due to physical disability may be retired if the condition is permanent and stable and the disability is rated by DOD as 30% or greater.⁵ These retirees are generally referred to as Chapter 61 retirees, a reference to Chapter 61 of Title 10, which covers disability retirement. As a result, some disability retirees are retired before becoming eligible for longevity retirement while others have completed 20 or more years of service.

A servicemember retired for disability may select one of two available options for calculating their monthly retired pay:

Longevity Formula. Retired pay is computed by multiplying the years of service times 2.5% or 2.0% (based on a date of entry into service before or after Jan 1, 2018), then multiplying that result by the pay base.
Monthly Retired Pay= (years of service x 2.5% or 2.0%) x (pay base)

Disability Formula. Retired pay is computed by multiplying the DOD disability percentage by the pay base.⁶
Monthly Retired Pay= disability % x (pay base)

The maximum disability percentage that can be used under the disability formula is 75%.⁷ Since the disability percentage method usually results in higher retired pay, it is most commonly selected. Generally, military retired pay based on longevity is taxable. Retired pay computed under the disability formula is also fully taxed unless the disability is the result of a combat-related injury.

Temporary Early Retirement Authority

Personnel retired due to force management requirements and before completing 20 years of service are generally referred to as "TERA retirees" because the National Defense Authorization Act for Fiscal Year 1993 granted Temporary Early Retirement Authority (TERA) as a force-sizing tool to entice voluntary retirements during the drawdown through 1995.⁸ TERA retired pay is calculated in the same way as longevity retirement, but there is a retired pay reduction of 1% of the retired pay base for every year of service below 20 years.

VA Disability Compensation⁹

For a veteran to qualify for VA disability compensation, VA must make a determination that the veteran has a current disability that is causally related to a particular injury or disease sustained in or aggravated by the veteran's service in the Armed Forces.¹⁰ Some exceptions exist for certain conditions that may not have been apparent during military service but which are presumed to be service-connected. The VA has a scale of 11 ratings, from 0% to 100%. Each percentage rating entitles the veteran to a specific level of disability compensation, although there is no direct arithmetical relationship between the benefits paid at each step.¹¹ In a major difference from the DOD disability retirement system, a veteran receiving VA disability compensation can ask for a medical reexamination at any time, and veteran who does not qualify for disability compensation upon separation or retirement from service can be examined or reexamined later. All VA disability compensation is tax-free, which makes receipt of VA compensation desirable, even with the operation of the offset.

Interaction of DOD and VA Disability Benefits

As veterans, military retirees can apply to VA for disability compensation. A retiree may (1) apply for VA compensation any time after leaving the service and (2) have their degree of disability changed by VA as a result of a later medical reevaluation, as noted above. Many retirees seek benefits from VA years after retirement for a condition that was incurred during military service but that does not manifest itself until many years later. Typical examples include hearing loss, some cardiovascular problems, and conditions related to exposure to Agent Orange.

The DOD and VA disability rating systems have much in common, but there are also significant differences. DOD makes a determination of eligibility for disability retirement only once, at the time the individual separates from the service. Although DOD uses the VA rating schedule to determine the percentage of disability, DOD measures disability, or lack thereof, against the extent to which the individual can or cannot perform military duties. Military disability retired pay, unlike VA disability compensation, is usually taxable unless related to a combat disability.

As a result of the current disability process, a retiree can have both a DOD and a VA disability rating, but these ratings will not necessarily be the same percentage. The DOD percentage is primarily based on fitness for duty and may result in the medical separation or disability retirement of the servicemember.¹² The VA disability rating, on the other hand, is designed to reflect the "reductions in earning capacity," and the "ratings shall be based, as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil occupations."¹³ Since September 2011, disability retirement cases at facilities worldwide have been processed through the joint DOD and VA Integrated Disability Evaluation System (IDES).¹⁴

Combat-Related Special Compensation

The FY2003 NDAA,¹⁵ as amended by the FY2004 NDAA,¹⁶ authorized CRSC. Military retirees with combat-related injuries that meet either of the following two criteria are eligible for CRSC:

• A disability that is "attributable to an injury for which the member was awarded the Purple Heart," and is not rated as less than a 10% disability by VA; or
• A disability rating resulting from involvement in "armed conflict," "hazardous service," "duty simulating war," or "through an instrumentality of war."¹⁷

This definition of combat-related encompasses disabilities associated with any kind of hostile force; hazardous duty such as diving, parachuting, or using dangerous materials such as explosives; and individual and unit training and exercises and maneuvers in the field. Instrumentalities of war include vehicles, vessels, or devices designed primarily for military service, like combat vehicles, Navy ships, and military aircraft. Injuries associated with instrumentalities of war may also be those associated with, for example, munitions explosions or inhalation of gases or vapors in combat training.

For CRSC, retirees must apply to their parent service (i.e., Army, Navy, Air Force, Marine Corps, or Space Force), and the parent service is responsible for verifying that the disability is combat-related. This process is application-driven, not automatic. CRSC payments are calculated by the amount of VA disability compensation that has been determined to be combat-related. CRSC legislation does not end the requirement that the retiree's military retired pay be reduced by the amount of the total VA disability compensation the retiree receives. Instead, CRSC beneficiaries are to receive the financial equivalent of concurrent receipt as "special compensation." The statute explicitly states that CRSC is not retired pay.¹⁸ As of September 2022, a total of 94,289 retirees were receiving CRSC (see Figure 1).¹⁹

Figure 1. CRSC Recipients by Disability Rating Number of recipients as of September 30, 2022

Source: DOD Office of the Actuary, Statistical Report on the Military Retirement System: Fiscal Year Ended September 30, 2022, September 2023 p. 68. Note: Data do not include 42 individuals with an unknown VA disability rating.

CRSC for Military Disability (Chapter 61) and TERA Retirees

In some cases, a servicemember may have an illness or injury that affects fitness for further service in the military. If the military department evaluates that the servicemember has a permanent, stable disability rating of 30% or greater, the member may be retired and receive retired pay prior to completing 20 years of service.²⁰ As noted earlier, these retirees are generally referred to as Chapter 61 retirees. In addition to Chapter 61 retirees, those who voluntarily retired under the TERA are also eligible for CRSC. The original CRSC legislation excluded those active-duty members who retired with fewer than 20 years of service.

The FY2008 NDAA expanded CRSC to include Chapter 61 and active-duty TERA retirees effective January 1, 2008.²¹ Eligibility does not require a minimum number of years of service or a minimum disability rating (other than the 30% DOD rating noted above for disability retirement); a 10% VA rating may qualify if it is combat-related. Eligible retirees must still apply to their parent service to validate that the disability is combat-related. The FY2008 NDAA included almost all reserve disability retirees in the eligible CRSC population except those retired under 10 U.S.C. §12731b, which allows reservists with a physical disability not incurred in the line of duty to retire with between 15 and 19 creditable years of service.²²

The Special Rule for Disability Retirees

Historically, Congress has generally prohibited an individual from receiving two separate lifelong government annuities from federal agencies for the same purpose or qualifying event. When authorizing CRSC, Congress created a special rule for Chapter 61 disability retirees who may be eligible for both DOD disability retired pay and VA disability compensation.²³ Application of the special rule caps the CRSC at the amount at which the retiree could have qualified based solely on years of service (longevity). In some instances, the special rule could limit or eliminate the concurrent receipt payment. In other instances, application of the rule may not result in any changes. Each individual's situation is unique due to a combination of factors such as rank, years of service, DOD and VA disability ratings, and the disability percentage attributable to combat. Those most likely to receive smaller benefits under CRSC due to the special rule are active-duty servicemembers with a disability retirement who have significantly less than 20 years of service and a high VA disability rating.

CRSC for Reserve Retirees

When CRSC was originally enacted in 2002, it required all applicants to have at least 20 years of service creditable for computation of retired pay. As a result, reserve retirees had to have at least 7,200 reserve retirement points (which converts to 20 years of equivalent service) to be eligible for CRSC. As noted earlier, a reservist receives a certain number of retirement points for varying levels of participation in the reserves, or active-duty military service. The 7,200-point figure could only have been attained by a reservist who had many years of active-duty military service in addition to a long reserve career. As enacted, this law effectively denied CRSC to almost all reservists.

A provision in the FY2004 NDAA revised the service requirement for reserve component personnel. It specified that personnel who qualify for reserve retirement by having at least 20 years of duty creditable for reserve retirement are eligible for CRSC.²⁴ While eligible for CRSC, reserve retirees must be drawing retired pay (generally, at age 60) to actually receive the CRSC payment.

CRSC Eligibility Summary

Essentially, all military retirees who have combat-related disabilities compensable by VA are eligible for CRSC (see Figure 2). Military retirees with service-connected disabilities that are not combat-related as defined by the statute are not eligible for CRSC, but may be eligible for CRDP, as discussed below.

Figure 2. CRSC Eligibility

Source: CRS, Title 10 of the U.S. Code. Notes: Member refers to a retired member of the Armed Forces. TERA retirees are those retired with less than 20 years of service due to force management requirements. VA awards disability ratings in 10% increments. VA pay is veteran disability compensation.

Concurrent Retirement and Disability Payments

The FY2004 NDAA authorized, for the first time, full concurrent receipt of retired pay and veterans' disability compensation for retirees with at least a 50% disability, regardless of the cause of disability.²⁵ The law phased in the amount of concurrent receipt over a 10-year period, from 2004 to 2013, except for with regard to 100% disabled retirees, who became entitled to immediate concurrent receipt effective January 1, 2005. In 2014, all offsets ended; military retirees with at least a 50% disability became eligible to receive their entire military retired pay and VA disability compensation. In FY2022, 800,325 retirees received CRDP.²⁶

Figure 3. Current CRDP Recipients by VA Disability Rating Recipients as of September 30, 2022

Source: DOD Office of the Actuary, Statistical Report on the Military Retirement System: Fiscal Year Ended September 30, 2022, October 2023, p. 68. Notes: Disability retirees must have over 20 years of service to qualify for CRDP. Data in this table do not include 815 individuals with an unknown VA disability rating.

A retiree cannot receive both CRSC and CRDP benefits. The retiree may choose whichever is more financially advantageous and may change their election during an annual open season to maximize payments. There are currently some categories of retirees who are not eligible for CRDP benefits (see Figure 4). These include

• Military retirees with service-connected disabilities rated by the VA at 40% or less, including Chapter 61 retirees with 20 or more years of service and 40% or less rating; and
• Chapter 61 disability retirees with fewer than 20 years of service and any rating for service-connected disabilities.

Figure 4. CRDP Eligibility

Source: CRS, Title 10 of the U.S. Code. Notes: "Member" refers to a retired member of the Armed Forces. "YOS" means "years of service." TERA retirees are those retired with less than 20 years of service due to force management requirements. Disability ratings are awarded in 10% increments.

CRDP for TERA Retirees

The FY1993 NDAA granted temporary authority for the services to offer early retirements to personnel with more than 15 but fewer than 20 years of service.²⁷ Congress extended this authority in subsequent authorization bills. The military services used TERA as a force-sizing tool to entice voluntary retirements during the post–Cold War drawdown.

TERA retirees are eligible for CRSC and CRDP even though they have fewer than 20 years of service. The special rule for disability retirees (see "The Special Rule for Disability Retirees") does not apply to TERA retirees since TERA is not considered a disability retirement.

Concurrent Receipt and Blended Retirement System Lump Sum Payments

The Blended Retirement System (BRS), effective for all servicemembers joining on or after January 1, 2018, offers servicemembers the option to select a lump sum payment of a portion of their military retired pay in lieu of a monthly annuity.²⁸ If a member retiring under the BRS is eligible for CRDP and elects the lump sum payment of retired pay, the individual continues receiving a monthly VA disability payment. If the member electing the lump sum payment is not eligible for CRDP (i.e., the retired pay offset applies), VA withholds disability payments until the sum of the amount withheld over time equals the gross amount of the lump sum payment.²⁹ If the member is eligible for CRSC, the procedures for withholding VA disability payments relate to the combat-related portion of the total VA entitlement.³⁰

CRSC and CRDP Comparisons and Costs

CRSC and CRDP share some common elements, but are unique benefits. Table 1 summarizes some of the similarities and differences between CRSC and CRDP.

Funding

CRDP and CRSC are funded through accrual payments to the DOD Military Retirement Fund (MRF) established under 10 U.S.C. §1461.³¹ DOD and the Department of Homeland Security (for the Coast Guard) make contributions to the MRF through annual appropriations to account for the cost of future retirees.³² This contribution is a percentage of basic pay for members of the Armed Forces, called the normal cost percentage (NCP). The U.S. Department of Treasury is responsible for mandatory contributions to the fund to account for the unfunded liability incurred at the establishment of the MRF in FY1985 and for the addition of the U.S. Coast Guard to the fund in FY2023.³³ The DOD Board of Actuaries determines the NCPs for DOD and Treasury.³⁴

In 2003, when Congress authorized concurrent receipt benefits, it specified that DOD's contributions would be determined "without regard to" the concurrent receipt benefits, having the practical effect of giving Treasury the responsibility for normal cost payments for concurrent receipt benefits.³⁵ According to the DOD Board of Actuaries,

We believe the original intent of the Concurrent Receipt rules was to limit the increase in DoD costs triggered by eliminating VA disability benefit offsets and increasing MRF liabilities, not to transfer the majority of NCP funding responsibility to Treasury. The current situation appears to be an unintended consequence driven by the increased VA disability benefit utilization, and a potential misapplication of the Concurrent Receipt rule relative to its original intent.³⁶

Payments out of the fund have risen nearly every year as a consequence of the phased implementation and a rise in the number of eligible recipients.³⁷ As of September 2022, 44.8% of all military retirees collecting retired pay were receiving either CRDP or CRSC (see Table 2).³⁸

Other Compensation for Injuries or Deaths Related to Military Service

Another way that deceased or disabled servicemembers or their families can potentially obtain government compensation is by suing the government in court. However, the United States has sovereign immunity, which prevents private citizens from suing it in court unless the government consents to the suit.³⁹

Claims Brought by Veterans (Unrelated to Military Service)

Congress has waived the United States' sovereign immunity in certain circumstances, including for some tort claims for injuries or deaths caused by negligent or wrongful acts of federal employees.⁴⁰ Subject to various exceptions and conditions, the Federal Tort Claims Act (FTCA) of 1946 generally authorizes plaintiffs to bring civil lawsuits:

• against the United States;
• for money damages;
• for injury to or loss of property, or personal injury or death;
• caused by a federal employee's negligent or wrongful act or omission;
• while acting within the scope of his or her office or employment;
• under circumstances where the United States, if a private person, would be liable to the plaintiff in accordance with the law of the place where the act or omission occurred.⁴¹

The FTCA thus authorizes veterans in certain circumstances to sue the United States for the negligent or wrongful acts of federal employees.⁴² Most relevant to the disability context, this authorization can include lawsuits involving VA medical personnel acting within the scope of their employment⁴³ but not, as discussed below, some types of lawsuits involving the veteran's military service-related activities.

While a court may award a plaintiff money damages in an FTCA suit for medical malpractice or other injuries caused by VA, Congress specifically provided that such FTCA judgments would postpone VA disability benefits related to the same injury until the amount of forestalled benefits equaled the amount of the judgment.⁴⁴ In other words, a veteran who wins or settles a medical malpractice lawsuit has their VA benefits withheld in the same amount of the award.⁴⁵ For example, if a veteran suffered an injury at a VA hospital that resulted in a disability that entitled her to $1,000 per month, but she also sued VA under the FTCA and was awarded $50,000 in damages, her disability benefits would be withheld for four years and two months (i.e., 50 months) following that award. For very large awards, the veteran might not receive any further monthly benefits because the cumulative withheld benefits would never exceed the full amount of the award.

Claims Incident to Military Service

The Feres doctrine limits suits against the United States for injuries arising from active military service.

Congress specifically excluded claims arising out of wartime military combatant activities from the FTCA,⁴⁶ meaning that the United States is immune from suit for compensation based on wartime active-duty servicemembers' injuries or deaths from combatant activities.

In 1950, the Supreme Court recognized an additional limitation on military service-related lawsuits, holding that the United States is immune from suit for injuries that arise out of, or occur during, activities "incident to [military] service."⁴⁷ Unlike the explicit statutory bar on lawsuits arising out of combatant activities, the bar on lawsuits arising out of military service activities is a judicially created exception to the FTCA without any explicit textual basis.⁴⁸ This exception is known as the Feres doctrine, named for the Supreme Court case dismissing claims brought by or on behalf of several servicemembers who sustained injuries due to the alleged negligence of others in the Armed Forces.⁴⁹ The Supreme Court has routinely declined invitations to revisit or alter the Feres doctrine,⁵⁰ although at least one member of the Court routinely dissents from denials of certiorari and urges that Feres should be overruled.⁵¹

Federal courts sometimes conclude that circumstances of individual cases fall outside the scope of the Feres doctrine. For example, the U.S. Court of Appeals for the Ninth Circuit determined one servicemember's alleged sexual assault by another servicemember following attendance at a civilian conference was not an injury "incident to service" and the Feres doctrine did not prohibit a lawsuit based on that injury.⁵² Recognizing the continued "expansive nature" of the Feres doctrine, the court engaged in extensive factual analysis before reaching its conclusion.⁵³ The court nevertheless suggested that the existence of an "egregious intentional tort" like sexual assault may weigh heavily against applying Feres, given that such torts are fundamentally different from the types of military, mission-related negligence cases often subject to Feres analysis.⁵⁴

Congress has authorized some actions that would otherwise be barred by the Feres doctrine.

In 2019, Congress enacted a provision in the FY2020 NDAA authorizing the Secretary of Defense to allow, settle, and pay an administrative claim against the United States for personal injury or death of a servicemember caused by a DOD health care provider's medical malpractice.⁵⁵ Similar provisions had been previously introduced in both houses as the SFC Richard Stayskal Military Medical Accountability Act,⁵⁶ named for a Purple Heart recipient whose misdiagnosis while he was on active duty allegedly allowed a cancer to spread until it became terminal. (Unlike the law as enacted, the standalone bills would have allowed lawsuits in federal court rather than directing claims to a DOD administrative proceeding.⁵⁷)

The provision authorizing DOD administrative settlements, codified at 10 U.S.C. §2733a, provides a path for relief in cases alleging medical malpractice by DOD health care providers. Although it does not allow lawsuits in federal court (and thus does not technically alter the Feres doctrine), it does provide an avenue by which some servicemembers may receive compensation for certain injuries or disabilities—conceivably, for the same injury or disability that might entitle them to disability retired pay or VA disability compensation. The DOD regulations clarify that an administrative medical malpractice claim "will have no effect on any other compensation the member or family is entitled to under the comprehensive compensation system applicable to all members," but that a claimant may not "receive duplicate compensation for the same harm."⁵⁸

In 2022, in the Camp Lejeune Justice Act, Congress created another path for certain medical malpractice claims that might otherwise be barred by the Feres doctrine.⁵⁹ Under that act, individuals (including veterans) who were exposed to contaminated water at Marine Corps Base Camp Lejeune in North Carolina for at least 30 days between August 1, 1953, and December 31, 1987, were permitted to sue the United States for harm caused by that exposure.⁶⁰ The act required claims to be filed by the later of August 10, 2024, or 180 days after the claim was denied by the appropriate federal agency.⁶¹ Claims arising out of combatant activities are expressly excluded from the act.⁶² Relief awarded under this law is offset by the amount of any health care or disability benefits related to water exposure at Camp Lejeune received from programs administered by the Department of Veterans Affairs, Medicare, or Medicaid.⁶³

Other Options for Congress

Veteran advocacy groups continue to lobby for changes to the concurrent receipt programs that would expand benefits to a larger population of retirees. Other groups have pressed Congress to offset or streamline duplicative benefits, contending that the dual receipt of VA and DOD payments amounts to double-dipping, or in some cases triple-dipping for those veterans also eligible for Social Security Disability Insurance (SSDI) from the Social Security Administration.⁶⁴

Some of the factors that Congress might consider regarding potential changes include funding, program efficiencies, individual eligibility requirements, and interaction with other servicemembers' and veterans' benefits and programs. Below are some options to change concurrent receipt programs that have been proposed or considered.

Eliminate or Sunset Concurrent Receipt Programs

The Congressional Budget Office (CBO) has previously estimated that eliminating the CRDP would save the government $139 billion between 2018 and 2026.⁶⁵ While achieving significant cost savings, eliminating or sunsetting CRDP, CRSC, or both could be unpopular among servicemembers, veterans, and their families. Some previous efforts to reduce benefits to servicemembers have included a grandfather clause that would allow all current servicemembers and retirees to maintain existing benefits while the law would only apply to those who joined the service after a specific date.

Allow Concurrent Receipt for Combat-related Disabilities Only

One option could be to eliminate concurrent receipt for noncombat-related disabilities. This option would essentially repeal CRDP and expand CRSC to allow for any retired member to receive concurrent DOD and VA payments, but only for the amount of the disability determined to be combat-related under existing law or other defined criteria. A member could continue to receive VA disability payments and retired pay, but the offset would apply to the portion of VA disability compensation not related to combat. This would reduce or eliminate the concurrent benefit for some military retirees with disabilities rated at 50% or greater that are not related to combat.

Extend CRDP to All Chapter 61 Disability Retirees

As previously discussed, the FY2008 NDAA extended CRSC eligibility to Chapter 61 retirees who retired due to combat-related physical disability prior to completing 20 years of service. However, Chapter 61 retirees with service-connected disabilities rated less than 50% or with less than 20 years of service are not eligible for CRDP. Congress could expand the CRDP provision to include this cohort. Allowing for a disability retiree to receive retired pay calculated by disability (not longevity) simultaneously with VA disability calculated based on the same disability percentage could be characterized as paying for the same disability by two separate agencies (DOD and VA).

Modify or Eliminate the Special Rule

The special rule affects concurrent receipt calculations for Chapter 61 disability retirees. For those whose CRSC payment is limited or eliminated by the special rule, there may be a perceived inequity between CRSC recipients with 20 or more years of service (longevity retirees) and Chapter 61 retirees (disability retirees who generally have less than 20 years of service).

To resolve this potential issue, Congress could modify or eliminate the special rule or limit its application to specific military operations. Again, eliminating or modifying the special rule would result in a situation that could be perceived as two agencies paying for the same disabilities.

Split Compensation by Agency for Longevity and Disability

Another option would be to overhaul the military retirement and disability system whereby DOD would only compensate for years of service and VA would only compensate for disability, as recommended by the Dole-Shalala commission in 2007.⁶⁶ This commission recommended that in all cases DOD annuity payments should be "based solely on rank and length of service," while VA should "assume all responsibility for establishing disability ratings and for all disability compensation and benefits programs."⁶⁷ Under this scenario, Chapter 61 retirees would not be eligible for DOD retired pay calculated under the disability formula. This could make the calculation of retired pay and disability compensation for these retirees less complex.

Extend CRDP to Those with a 40% or Less VA Disability Rating

At present, those military retirees with service-connected disabilities rated at 50% or greater are eligible for CRDP. Congress could revise the concurrent receipt legislation to include the entire population of military retirees with service-connected disabilities. In 2014, CBO estimated that extending benefits to all veterans who would be eligible for both disability benefits and military retired pay would cost $30 billion from 2015 to 2024.⁶⁸

Consider Interactions with other Federal Benefits

One option for Congress might be to consider the total monetary benefits that a veteran receives from the federal government. Part of the historical basis for post-service compensation from as early as the 1800s was to account for a physical disability incurred in military service or to provide economic security for aged veterans.⁶⁹ In the decades since, the government has established several other income security programs. As noted by the Bradley Commission in 1956, due in part to the establishment of a Social Security system,

The basic needs of all citizens, veterans and nonveterans alike, for economic security are being increasingly met through general Federal, State, and private programs. […] These general income-maintenance expenditures […] benefit veterans and their families as well as the general population.

The disability benefits programs of Government agencies are expanding. Various disability programs affect veterans, but there appear to be great differences in philosophy and purpose. There is a need for better coordination and for common standards on a governmentwide basis.⁷⁰

Congress has, in the past, expressed concern about the sustainability of social security benefits and potential overlaps in disability benefits. In 2014, in response to a congressional inquiry into the compensation received by disabled military personnel, the Government Accountability Office reported that a total of 2,304 military retirees received concurrent federal payments of $100,000 or more from DOD retirement, VA disability compensation, and SSDI—with one beneficiary receiving the highest total of $208,757 annually.⁷¹

More recently, in a 2022 report, CBO proposed options for amending VA disability benefits law to reflect eligibility for other federal benefits. One such option would reduce VA disability benefits paid to veterans who are older than the full retirement age for social security. The CBO explained,

VA's disability payments are intended to compensate for the average earnings that veterans would be expected to lose given the severity of their service-connected medical conditions or injuries, whether or not a particular veteran's condition actually reduced his or her earnings. Disability compensation is not means-tested: Veterans who work are eligible for benefits, and most working-age veterans who receive such compensation are employed. After veterans reach Social Security's full retirement age, VA's disability payments continue at the same level. By contrast, the income that people receive from Social Security or private pensions after they retire usually is less than their earnings from wages and salary before retirement.⁷²

Some observers have argued that lawmakers should consider a broad "modernization of the disability ratings system" including implementing means-testing in the name of fiscal responsibility.⁷³ Such an effort might consider disability compensation with respect to the earnings potential of veterans in the contemporary economy. Since at least the Civil War, earning capacity for the purpose of VA disability benefits was largely based on the individual's ability to perform manual labor.⁷⁴ Today, the proportion of jobs in professional, managerial, clerical, and other primarily desk-based jobs relative to manual labor jobs in the U.S. economy has increased, potentially shifting estimates of earnings capacity for those with physical disabilities.⁷⁵

Some veteran advocacy groups have argued that VA payments compensate for unique disabilities associated with the physical and mental stress of military service that affect not only employment opportunities and earnings potential, but also quality of life.⁷⁶ Congress may consider these arguments, in light of other fiscal and policy goals.⁷⁷

Modify Concurrent Receipt Normal Cost Responsibilities

Since the full phase-in of the concurrent receipt benefit, the normal costs paid by the government have increased and the share of normal costs paid by the Treasury have increased relative to DOD's contribution. The FY2024 President's budget request included $20.7 billion in mandatory funding for accrual payments for future concurrent receipt benefits, a significant increase over the $10.6 billion budgeted for such payments in FY2023.⁷⁸ Some observers raised questions as to the cause of this substantially higher estimate for that particular fiscal year. The increase followed revised assumptions of the DOD Board of Actuaries (the Board) in 2022 to reflect higher Department of the Treasury costs for concurrent receipt accrual payments.⁷⁹ In particular, the Board approved the Treasury's normal cost percentage (NCP) at nearly double its prior estimate under earlier assumptions (from 16.1% to 28.3%).⁸⁰ The Board cited several factors as contributing to increasing concurrent receipt costs, including more incentive among servicemembers to apply for the benefits, broader definitions of disability and higher disability ratings by the VA, and higher incidence of combat-related disability from recent conflicts.⁸¹ The Board also noted potential impacts of the enactment of the Honoring Our PACT Act of 2022 (P.L. 117-168), which expands VA disability benefits related to burn pits and other toxic substances, could further increase these costs.⁸²

In a 2022 letter to then-Defense Secretary Lloyd Austin, the DOD Board of Actuaries noted that this upward trend in concurrent receipt eligibility has resulted in a decrease in DOD's share of the total NCPs leading to a situation where Treasury would be paying more than half of the normal cost for military pensions. In FY2025, Treasury crossed this threshold, paying 54% of the total NCP (see Table 3).⁸³

Figure 5. DOD and Treasury Share of Total NCPs FY2005 and FY2025

Source: DOD Board of Actuaries, 2024 Report to the President and Congress Regarding the Status of the Military Retirement Fund, April 2024, p. 16.

As shown in Figure 5, the total NCP increased between 2005 and 2025, and this increase is mainly borne by Treasury contributions to account for concurrent receipt liabilities as required by 10 U.S.C. §1466(c)(2)(D) (see also the "Funding" section above). In 2022, the Board stated, "It does not seem appropriate that the majority of annual normal costs for service members should be funded directly from Treasury, as opposed to running through DOD's budget."⁸⁴ In its 2024 report, the Board reiterated its concern that the current accounting method for concurrent receipt "obscures the true cost of MRF benefits."⁸⁵ To avoid understating DOD's actual costs associated with the benefit, the Board recommended that Congress amend or reinterpret language in 10 U.S.C. §1465(c)(1) such that DOD, rather than Treasury, funds at least some portion of the normal costs for concurrent receipt. Shifting the burden of funding concurrent receipt benefits to the DOD could result in trade-offs with other DOD benefits and programs.

Footnotes