ask the Chief

disability compensation questions

Becoming an expert in any specialty in the military takes time.  The nature of military assignments is such that individuals transfer and often take that expertise with them!   This is particularly aggravating in the specialties that relate to service members career and health administration.  Because the military is a large bureaucracy, with volumes of policies, regulations and procedures for virtually everything,  obtaining answers to specific situations is very difficult. 

military service and service-connected disabilities

 If you are on Active Duty getting close to your EAOS, a veteran with health issues possibly connected to your military service, or transitioning or enlisting in the Reserve as a veteran of Active Duty, you may find the following example from actual experience helpful.  This example is from a family member, a former soldier, who in the last year and a half of his Active Duty enlistment was plagued with shin splints, and an injury that incurred during training in a military culture that treats infirmity as a lack of physical and mental toughness. In most respects an excellent soldier, medical complications and the command climate influenced him to not consider re-enlisting.

From the author’s experience, the process of post-enlistment transition is much improved since the 1990s. The Army referred the soldier for transitional job training, and recommended him for a re-enlistment eligible discharge at his End of Active Obligated Service (EAOS). But there is some ambiguity in that transition. Whether assumptions made or questions went unasked, the service member knew that an initial enlistment contract in the military was a commitment to eight years of total service. Three, four or six years of an Active Duty service and the balance served in the Active or Inactive component of the Reserve. But it is apparent that the soldier was not aware that inactive or IRR service was the default to serve out the balance of the contract. In an inactive status, the service member does not drill nor receive compensation, but annually is only required to inform the military of any changes in status or address.

evaluation by the VA for disabilities

However, as part of the soldier’s transitional assistance he was recommended to go to the Veterans Administration off-post to be evaluated for the medical conditions resulting from, or aggravated by, military service. Once processed out of the Army and possessing a DD214, the official record of military service for veterans, the Veterans Administration determines he has a service-connected disability.    Further,  the severity of the disability finding is such that the veteran receives a 100 percent rating and compensation for injuries and illness sustained while in the military service.   

Can a disabled veteran still serve?

There are different categories of service-connected disability, and either the service branch or the Veterans Administration may determine a disability exists. Unless the member or his command requests a Medical Review Board prior to the service member’s discharge, and the service branch makes a determination, the veteran can go to the Veterans Administration for a medical evaluation. Either may result in a finding of service-connected disability which may be eligible for compensation.

the DD214 is key to benefits and reenlistment

There is no prohibition on its face, for a veteran receiving compensation from the VA for a disability to reenlist in the Reserve component. For the military branch, the re-enlistment code on the DD214  is the clearest indicator of eligibility. Getting a clear answer from the military service representative is difficult. As any veteran can attest, expertise is a rare commodity. Rumor, half-answers and lack of knowledge dominates. The individual affected or a specialist, like a service-organization (VFW, DAV, or AL) representative, may find the answers more readily.

Unless a veteran is in receipt of a classification of 100 percent disability / unemployable, a veteran receiving compensation for 100 percent disability, may serve in the Active Reserve, unless the Reserve determines that the member needs to be medically evaluated and screened for enlistment. This apparently can become, unintentionally,  bureaucratically cumbersome, where the member cannot receive military pay and a VA compensation. Suspending ones compensation, or a finding by the military branch that the members disability rating is less than what the VA has determined, can be confusing at best.   

U.S. military veterans of past conflicts have the same opportunity to receive care and compensation for disabilities incurred or aggravated by military service. While some medical and service records have been damaged or lost from a several decades-old fire (1973) at the national archive when records were stored on paper, most veterans have access to records that assist them when requesting benefits. Current policies evaluate a list of symptoms, dates and locations stationed with compensation – or medical-treatment- eligible illnesses.

Even a finding by the Veterans’ Administration of a Service-Connected Disability, rated at 0 (Zero) Percent, allows the veteran to obtain benefits for herself or her family. It can be reviewed and re-evaluated based on additional evidence, including civilian medical records documenting conditions a physician attests to military service. Many times, a veteran has received benefits that retroactively are granted back to the period of the veteran’s discharge.

If there is one piece of advice that any service member or veteran should heed, it is to get evaluated. Physical and emotional ailments can be treated before they cause further disabilities. Suicide among veterans, homelessness, PTSD, and drug addiction are among the most severe problems affecting men and women who

no substitute for becoming informed

Visiting or becoming a member of a veterans’ service organization is the best source for information to support a veteran of the armed forces. (Spouses can also become auxiliary members of these organizations.) The Veterans of Foreign Wars (VFW), American Legion and the Disabled American Veterans (DAV) are the most well-known. Vietnam veterans and Iraq-Afghanistan veterans have service organizations as well. They have expertise, first-hand experience and the resources to assist veterans with claims to the VA and benefits the veteran may be unaware of. And personally becoming educated is no less important. The following links are reference material to support obtaining a medical discharge,  supporting a veteran’s request to change military status and official records (DD214), and understanding the policies and options for a veteran. The veteran in this example is still working through the bureaucracy, though VA compensation has continued uninterrupted.

Guide to Obtaining a Medical Discharge (unofficial)

Medical Evaluation Board (PowerPoint)

Requesting a change to your military discharge (DD214)

Navy Reserve Retirement

For me, if I have done my duty, the continued approbation of Congress and the Marine Committee will make me rich indeed, and far more than reward me for a life of service devoted from principles of philanthropy, to support the dignity of human nature. John Paul Jones

 when you tire of the b#@@s&!t

In recent months I have been thinking of retiring – again.  A few of my civilian friends do not want to retire because they associate it with an early demise.  A few of my industry peers cannot retire because they have expenses that they cannot afford without working.  But other friends, military retirees, private sector employees, businessmen and other with thirty years or more years in the state or federal system,  decided they were financially, and mentally, ready to retire and did so.   Of course, an important consideration for retiring, besides financial security, is having interests that keep a retiree involved.   While a boat sounds tempting to while away time in my old age, I think I will prefer buying a ticket to go cruising rather than paying for maintenance and dock fees.

making good choices 

I am rather fortunate in that I have a portion of my retirement plan based on a twenty-six year career in the Navy.  While a little more than half was spent on Active Duty,  the remainder – and in fact, on the date I retired, I  was a Selected Reservist.   For the twenty years that have preceded my turning sixty and eligibility for retirement pay,  I have been working in the private sector, accumulating  401K investments and paying down a home in California.  Much of this has been supported and augmented by my spouse having a well-paying career.  And putting off  “keeping up with the Joneses” that so many others have fallen into.  From studying and application from numerous financial educators, advisers, and both good and poor examples in your ‘circle’, almost everyone who plans carefully from their earliest working years – or with arduous self-denial and fiscal obsessiveness in later, higher-salaried years can retire with some degree of security.   

war, sea duty and broken service

I applied to go back on Active Duty, in the same rating I had originally entered the service in the late 1970s.  For the next thirteen years,  I had traveled the world, but the bureaucracy and politics regarding advancement opportunities and changing personal goals inspired a change.  I left the service at the end of my enlistment in 2000.   But a few months later,  I enlisted (again) in the Navy Reserve!   To sum it up,   I retired with almost 26 years of service as a Senior Chief Cryptologic Maintenance Technician,.  But as a Reservist, the retirement system is calculated not to pay the retiree until he or she turns 60 years of age. 

Second, the retiree must file for her retirement stipend on or after age sixty.  The unique feature of Reserve retirement, is that the service member who is eligible for and requests retirement after 20 good years – the Navy sends a statement to each member when they have qualified – can transfer to the Retired Reserve without pay until age 60.  Retirement is calculated as though the member continues to remain on the service rolls.  The retirement calculator uses the Active Duty member’s base pay – in effect for their final paygrade – at the time one starts drawing payment.   One other caveat determining the pay calculation is whether the service member entered military service initially prior to September 1, 1980.   Those retired Reserve members like me, will receive their pay calculation based on the paygrade held at the time of retirement.  All  enlistees after September, 1980 retire have their pay calculated from the last three years of service regardless of their final pay grade, divided by 36 months.  

veterans’ benefits

Additionally,  when a service member retires, it is worth all the bureaucratic tape, to file for review by the Veterans’ Administration for any potential Service-Connected Disability rating.  Even a finding of a connection, but a rating of zero – the condition is not posing debilitation in health at the present time – is able to help those members through other benefits.  In California,  children of a service-connected disability -veteran or retiree, are eligible to attend a UC or CSU university-system school tuition-free.

For more information

  •  DOD Military Reserve retirement compensation information 
  • Navy Department website for Reserve Retirement. (Each service branch has similar sites.)
  • Application for retirement pay upon reaching age 60,  DD  Form 108
  • Data  DD Form 2656 
  • BUPERS INSTRUCTION 1001.39, ADMINISTRATIVE PROCEDURES FOR NAVY RESERVISTS ON INACTIVE DUTY, Chapt 20

Combat-injured veterans tax relief

righting a wrong

Of all the things that politicians do that gets people’s dander up,  then-President Obama signed into law  a bill that rights a wrong for combat-injured veterans.   For more than a hundred-thirty thousand  veterans whose combat injuries ended their careers,  the government has ended taxing their severance pay.  The veterans affected served from 1991 (Desert Storm) through the present.

The IRS bulletin :

The Combat-Injured Veterans Tax Fairness Act of 2016, enacted December 2016, allows certain veterans who received lump sum disability severance payments additional time to file a claim for credit or refund of an overpayment attributable to the disability severance payment. The law directed the Secretary of Defense to identify disability severance payments paid after January 17, 1991, that were included as taxable income on Form W-2, Wage and Tax Statement, but were later determined to be nontaxable and to provide notice of the amount of that payment. The Department of Defense is mailing letters to affected veterans (letters 6060-A and 6060-D) in July 2018.

What this means for some veterans

Veterans discharged from military service due to medical disability may receive a one-time lump sum severance payment. Disability severance pay is taxable income unless the pay results from a combat-related injury or the service member receives official notification from the Department of Veterans Affairs (VA) approving entitlement to disability compensation.

Anyone who received a disability severance payment that was taxed and determines later that the payment qualifies under one of the rules above can file a claim for credit or refund for the tax year in which the disability severance payment was made and was included as income on a tax return.

For veterans who received a lump sum disability severance payment after January 17, 1991, the Combat-Injured Veterans Tax Fairness Act of 2016 may provide additional time to claim a credit or refund for the overpayment attributable to the disability severance payment.

What you need to do

You must complete and file IRS Form 1040X, Amended U.S. Individual Income Tax Return, for the tax year the disability severance payment was made carefully following the instructions in the notice mailed by the Department of Defense in July 2018. You must mail the claim generally by the later of:

  • 1 year from the date of the Department of Defense notice, or
  • 3 years after the due date for filing the original return for the year the disability severance payment was made, or
  • 2 years after tax was paid for the year the disability severance payment was made.

If you did not receive the notice from the Department of Defense and you received a disability severance payment after January 17, 1991, that you reported as taxable income, you can still file a claim as long as you attach the necessary documentation to your Form 1040X. You may contact the Defense Finance and Accounting Services to obtain your documentation for submission with the required Form 1040X. See the FAQs for additional information.

Text of the 2016 law: