The term, "concurrent receipt" is a factor in the law which states that a retired military member's retired pay must be reduced by the amount of any disability compensation that the retire receives from the Veterans Administration. In other words, if a retiree was entitled to $2,000 per month in retired pay, but received $1,000 per month from the VA for disability compensation, the law required that his/her retired pay be reduced by $1,000 per month.
The end result was that the retiree received the same pay, but only part of it was subject to taxes, as disability compensation is not taxable, while military retirement pay is.
As part of the FY 2003 Military Authorization Act, Congress helped to off-set some of this inequity by providing a special pay for retired members who were disabled due to combat. This special pay only partially off-set the penalties of concurrent receipt.
Congress has now taken this a step further. Effective Jan. 1, 2004, all 20-year retirees with a Purple Heart or a combat- related disability will be eligible for concurrent receipt. That means they will receive their full retired pay, plus their full authorized disability payments.
For other (non-combat) disabled retirees, or at least those rating with disabilities of 50 percent or more, concurrent receipt will be phased in between ca lander year 2004 and calendar year 2013. The phase-in schedule is as follows:
CALENDAR YEAR 2004 - For 2004, military members will receive their VA disability pay, plus the below portion of their retired pay which was being offset due to concurrent receipt restrictions:
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For example, let's say a 50 percent disabled retiree is entitled to disability compensation in the amount of $1,000 per month, and retirement pay of $2,000 per month. In 2003, the retiree received $1,000 per month in disability compensation, and only $1,000 per month in retirement pay, because $1,000 of his retired pay was off-set by concurrent receipt restrictions. In calendar year 2004, the retiree would receive $1,000 per month in disability compensation, and $1,100 per month of his retired pay ($900 per month would still be off-set).
CALENDAR YEAR 2005 - During calendar year 2005, the retiree would receive the amount he/she received in 2004, plus 10 percent of the difference between their retirement off-set and the amount shown above.
Take the above example. The member has a retirement off-set of $1,000 per month. Subtract from that the $100 in extra pay (see above) for a 50 percent retiree. The result is $900. The member would receive the same he/she received in 2004, plus 10 percent of $900 ($90.00).
CALENDAR YEAR 2006 - The amount received in 2005, plus 20 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2007 - The amount received in 2006, plus 30 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2008 - The amount received in 2007, plus 40 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2009 - The amount received in 2008, plus 50 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2010 - The amount received in 2009, plus 60 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2011 - The amount received in 20010 plus 70 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2012 - The amount received in 2011, plus 80 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2013 - The amount received in 2012, plus 90 percent of the difference between their retirement off-set and the amount shown above (for 2004).
For information on how the Defense Finance & Accounting Service (DFAS) will make payments, see DFAS's Concurrent Receipt Information Page.
UPDATE:Â As of January 2014, the phase out program is completed.
The end result was that the retiree received the same pay, but only part of it was subject to taxes, as disability compensation is not taxable, while military retirement pay is.
As part of the FY 2003 Military Authorization Act, Congress helped to off-set some of this inequity by providing a special pay for retired members who were disabled due to combat. This special pay only partially off-set the penalties of concurrent receipt.
Congress has now taken this a step further. Effective Jan. 1, 2004, all 20-year retirees with a Purple Heart or a combat- related disability will be eligible for concurrent receipt. That means they will receive their full retired pay, plus their full authorized disability payments.
For other (non-combat) disabled retirees, or at least those rating with disabilities of 50 percent or more, concurrent receipt will be phased in between ca lander year 2004 and calendar year 2013. The phase-in schedule is as follows:
CALENDAR YEAR 2004 - For 2004, military members will receive their VA disability pay, plus the below portion of their retired pay which was being offset due to concurrent receipt restrictions:
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- (A) 100 percent disability -- $750 per month.
- 90 percent disability -- $500 per month.
- 80 percent disability -- $350 per month.
- 70 percent disability -- $250 per month.
- 60 percent disability -- $125 per month.
- 50 percent disability -- $100 per month.
For example, let's say a 50 percent disabled retiree is entitled to disability compensation in the amount of $1,000 per month, and retirement pay of $2,000 per month. In 2003, the retiree received $1,000 per month in disability compensation, and only $1,000 per month in retirement pay, because $1,000 of his retired pay was off-set by concurrent receipt restrictions. In calendar year 2004, the retiree would receive $1,000 per month in disability compensation, and $1,100 per month of his retired pay ($900 per month would still be off-set).
CALENDAR YEAR 2005 - During calendar year 2005, the retiree would receive the amount he/she received in 2004, plus 10 percent of the difference between their retirement off-set and the amount shown above.
Take the above example. The member has a retirement off-set of $1,000 per month. Subtract from that the $100 in extra pay (see above) for a 50 percent retiree. The result is $900. The member would receive the same he/she received in 2004, plus 10 percent of $900 ($90.00).
CALENDAR YEAR 2006 - The amount received in 2005, plus 20 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2007 - The amount received in 2006, plus 30 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2008 - The amount received in 2007, plus 40 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2009 - The amount received in 2008, plus 50 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2010 - The amount received in 2009, plus 60 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2011 - The amount received in 20010 plus 70 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2012 - The amount received in 2011, plus 80 percent of the difference between their retirement off-set and the amount shown above (for 2004).
CALENDAR YEAR 2013 - The amount received in 2012, plus 90 percent of the difference between their retirement off-set and the amount shown above (for 2004).
For information on how the Defense Finance & Accounting Service (DFAS) will make payments, see DFAS's Concurrent Receipt Information Page.
UPDATE:Â As of January 2014, the phase out program is completed.