Here you can find Resources and information concerning CRSC and CDRP
First one that explains how a comparison between the two Methods work.
Example for E-8 with 20 years, spouse and 2 kids under 18.
There are two Methods for CRSC calculations and DoD will pay the lower of the two amounts.
One is Time in Service-
- TIS X 2.5= %
- % X High 3= CRSC Amount
Other is percentage from Award of CRSC based on VA ratings.
So take the TIS Method.
- 20 X 2.5= 50%
- 50% X $4800= $2400 (Max allowed based in TIS)
Percentage 40% Use VA disability pay table.
- 40% based on above = $769
- 90% based on above =$2,174
- 100% based on above=$3,437
Analysis- for the E-8 with spouse and 2 kids with 100% VA Rating.
The 40% is not a smart option as CDRP is $2400 taxed.
So Vet gets $2,400 DoD Retirement taxed and $3,437 from VA not taxed.
If same Vet gets an increase to 90% CRSC based on increase in VA ratings.
- CDRP is $2,400 taxed
- CRSC is $ 2,175 not taxed
- VA disability $3,437 not taxed.
So here is the "tipping" point for taxed verus non taxed income. It may be better to take CRSC because all income is non taxed, which could make a difference with income tax brackets and other benefits based on state of residence.
Vet has to pick CDRP or CRSC can not receive both simultaneously.
Same Vet gets increased to 100% based on CRSC from VA ratings increase.
- CDRP $2,400 Taxed
- CRSC $3.437 (Will be limited to TIS amount)
So in this case all income is tax free and add VA disability pay.
Hope this helps!!
If a Vet is Rated 40% or lower with 20 year or TERA retirement then CDRP is not allowed so CRSC allowed.
Brief statement about Recoupments Severance pay is for a Medical Discharge.
If the conditions for for the Discharge are combat related then the VA will NOT recoup. The formula for recoupment is not a straight percentage from the VA disability chart. It's based on how much was received and the rating from VA, each person's will be different so let VA do their calculations to find out how much will be recouped based on your situation if it applies. Separation pay, all has to be paid back completely before any VA disability is received, however if a hardship is verified VA may accept a payment plan. Examples of Separation pay are Voluntary separation for pregnancy, humanitarian and etc. Other Separation pay are Involuntary, High year Tenure, Weight standards, Failure to Maintain Responsibility according to Rank and etc. Also the VSI/SSB has to be recouped but that is complicated.