So your VA disability claim is settled. Now what?

As I wrote a few weeks ago my VA disability claim was finally settled.  Suddenly, after nearly two years of pushing the rope up the hill, I found myself with one less windmill at which to tilt.

Although I can now put down my lance and put my trusty steed back in the barn, I still find the whole process to be pretty confusing.  In particular, figuring out just what being identified as a disabled veteran means in real terms — meaning just what impact does my rating have on a retiree’s bank account?

It turns out that if you have incurred an injury while serving in uniform, and that injury is determined to be disabling, then you are entitled to compensation from the Veterans Administration.  That compensation is paid directly to the veteran by the VA, which is nice.  It is also tax free, which is nicer.

But, as usual, things are not as simple as they seem.  Particularly for retirees who receive a pension for their 20+ years of service to the nation.  Like me.

In that case, any remuneration that you receive from the VA is offset by an equal deduction from your pension, with the only really difference in your retirement check being the portion from the VA that is tax free.  For example (and this example is in round numbers to keep things easy), if your pension is $1500 per month, you receive a check for $1500 minus any taxes (let’s say 20%, which is $300), or $1200.

Now, let’s say that you receive a disability rating that results in a payment from the VA of $100.  That $100 is not added to your check for a total of $1600.  Instead, $100 of the $1500 that was paid by the Defense Finance and Accounting Service (DFAS) is now paid by the VA, so the total pension amount stays the same.  What changes is how the taxes are computed.

Now you have $1400 that is taxable, which results in a slightly lower tax bill.  Here is the math:

$1400 x 20% = $280 in taxes.

$1400 (from DFAS) + $100 (from the VA) = $1500 (which is your pension amount).

$1500 (pension + VA Disability) – $280 (taxes) = $1220.

Sooooo…..as a retiree you get an extra twenty bucks in your monthly check.  If you are not a retiree, however, you get the full $100.

That seems really odd.  But wait, there’s more!

The reduction of your pension by the disability payment changes at the 50% disability threshold.  If you are rated as having a disability rating of 50% or more, then the bizarre math problem that we just performed goes away.  In that case, you receive your entire pension as well as the complete VA disability amount.

Sounds bizarre, eh?  I’m not making this stuff up!  Really!

It is known as Concurrent Receipt of VA Compensation and Retired Pay.  For a more in depth explanation of the math problems above, you can read all about how it all works by following this link.

For those of you who were wondering how pensions are affected by VA disability benefits, well, now you know.  For those of you to whom this does not apply, thanks for reading anyway!

Retired Veterans as a “Special Interest” group

As a uniform wearing member of the United States Armed Forces I viewed politics and the special interests that shape them as interesting, but largely irrelevant to my chosen profession.  By law and regulation I could not actively participate in politics; I could not wear my uniform to political events (not that I would have), and if I expressed any disdainful remarks about our elected officials I would have certainly followed in the flaming death spiral of General McChrystal after his disparaging remarks about the administration went public in that scion of popular culture: Rolling Stone magazine.

Once I hung my uniform up for the last time, however, those things that I found to be interesting and irrelevant became fascinating and important.  Suddenly, I was a member of a “Special Interest” group.  I became a retired veteran.

Suddenly, instead of taking what came my way with a smile or a shudder (depending on what it was) I could make some decisions and express my opinion about things and issues.  I could write this very blog and be critical of agencies and entities that I believe are not working in the best interest of veterans, and no commanding officer or general could haul me into his office and existentially threaten my career.

I am not a muckraker by nature, but I have no problem occasionally rocking the boat by writing about things and expressing my opinion about them.

That brings me to today’s post.  Earlier this week I received a newsletter that the Marine Corps mails out to all of us retirees. It contains lots of useful information, such as contact information for various offices and a checklist for my wife to follow when I die to make sure that all of the paperwork associated with my demise is properly completed.  It is a very factual and straightforward periodical.

The focus of this particular issue is TRICARE.  TRICARE, for those who are unfamiliar with the term,, is the medical care system for active duty and retired military members and their families.  The long and short of it is that active duty personnel and their families can receive medical care for free, but once you retire you are entitled to continue receiving care but you have to pay for it.

The cost of TRICARE is low in comparison to other plans, to be sure.  It is not a panacea, however.  It is a secondary or backup plan, so if you or your spouse has insurance through your job that plan comes first and TRICARE kicks in after that. You must submit co-pays for office visits and for prescriptions.  You must pick a doctor from an eligible list of providers.  It is a health care plan like most others, really, but not the golden egg as portrayed by the media.

TRICARE is insurance for vets and their families.  The VA provides healthcare for vets based on their service connected conditions, but does not provide services for their families.  So, if a veteran has a spouse and kids he or she needs to enroll in TRICARE to be covered.

In that manner it fit nicely with the Affordable Care Act that was passed in 2010.

In that manner, it was also viewed as a cash cow to subsidize others who did not have health care, with proposed fee hikes of 345% for some TRICARE members.

That, in my humble opinion, is exploiting a population of Americans who served their country, and as a result chose a career that was not as lucrative other pursuits.  A four star general, certainly equivalent to the CEO of a large corporation, makes a little over $200K per year.  How many CEOs of companys that employ thousands and tens of thousands of people make that little?  Scale it down the chain, with most officer making half that much but with the responsibility of leading hundreds and thousands of men and women in combat.  Is a 45 year old Wall Street hedge fund manager going to work for $90K a year and a pension of half that when he retires?  How about $50 or $60 or $70K per year that the majority of military members are making when they retire from service with half of that amount as a pension?

Nope.

Hence the low cost of TRICARE to the veterans and their families.  Military retirees pay an enormous opportunity cost in terms of lifetime earnings and employment possibilities to serve and defend their nation.  TRICARE is part of the remuneration package for those who have dedicated their adult lives to the service of their nation.

That brings me back to the newsletter I received in the mail the other day.  It discusses the proposed hikes in fees that TRICARE will face in the years ahead, and although I won’t personally see a 345% increase in my monthly bill, I will see it more than double.

Nice.  To all of those who complain that I pay to little and that my family and I are somehow getting over on everyone else because we pay low TRICARE premiums, I say that until you pick up a rifle and serve 20+ years in places where people are actively trying to kill you while your family waits at home in fear for your safety your opinion is both meaningless and insulting.  Decades of service in peace in war was the cost of membership in my “Special Interest” group, and if you aren’t a fellow member kindly shut your yap.

Anyhow, that is my opinion.

For what it’s worth.

Crossing the finish line – my VA disability claim is finally complete!

Well, it finally happened.  Nearly two years after beginning my VA disability claim process I learned today that my rating has been assigned and the case is closed.

Whew!

Looking back on the process, it has indeed been a long and occasionally painful ride.  Now that it is done, however, I think that the VA did a fair and objective evaluation of my various service related conditions.  It took much longer than I had expected, but now that it is finished I am pretty happy with the results.

So now what?

Although I am content with the results of my evaluation, I know that many veterans are not.  If my case was not settled to my satisfaction, I would pursue an appeal to have whatever condition that I felt was inadequately reviewed examined again. It is not at all uncommon for veterans to submit an appeal; in fact 60% of claims are “supplemental”, which is how appeals are classified.  Here are some interesting facts from the VA website about supplemental claims:

  • 60% of pending claims are supplemental, 40% are original.
  • 77% of Veterans filing supplemental claims are receiving some level of monetary benefit from VA.
  • 11% of Veterans filing supplemental claims already have a 100% disability rating (receive $2800 or more per month) or qualify for Individual Unemployability (compensated at the 100% disabled rate).
  • 40% of Veterans filing supplemental claims are already rated at 50% disability or higher.
  • 43% of supplemental claims are from Vietnam-era Veterans; 19% are from Veterans of Iraq and Afghanistan conflicts.

I am not personally going to appeal my decision, but for those who would like to do so here are a few pointers on how to start the process:

1.  Don’t even think about going it alone.  I have written extensively in earlier posts about the great work that Veteran Service Organizations (VSOs) perform to assist vets as they navigate the VA claims and appeals process.  I personally have consulted with the Disabled American Veterans (DAV), and they have been fantastic (and they don’t charge a dime to help, either!).  There are hundreds of VSOs to choose from, and to help you find one that best suits your needs you can consult the VSO-Directory_2012-2013, which is published by the VA on an annual basis.

2.  Recordkeeping is CRITICAL!  When you begin the appeal process you are in effect going back and starting the process all over again.  You will be filling out forms (with the help of your VSO!) that identify the condition that you are appealing and why, presenting evidence as to why you disagree with the determination (such as documentation that supports an injury, additional medical records from outside the military or VA system, etc.), and scheduling additional evaluation appointments with VA providers.  Just as you did with your original medical record, you will need to provide copies of all documents to the VA, and you are nuts if you don’t keep an organized file of originals for yourself.

3.  Be prepared to be very patient.  Just because your case has already been reviewed and completed by the VA it does not mean that your supplemental claim will move any faster than the original one.  Your appeal will have to go through the same wickets as your original claim did, and it will take just as long.  There is no “special” appeals pipeline.

4.  Do some research in order to fully understand why your ratings were determined in the manner that they were.  The VA does not compensate based on pain or inconvenience, but instead on the factors that contribute to a medically diagnose-able condition.  For example, your knee may hurt like crazy, and you may have injured it while jumping out of airplanes, but if a tangible medical condition (such as torn cartilage or joint damage) can be identified and documented you will be out of luck.  Follow this link to see the the details of how the VA determines how to rate medical conditions: Title 38: Pensions, Bonuses, and Veterans’ Relief  PART 4—SCHEDULE FOR RATING DISABILITIES .  It is a very informative and interesting read.

Good luck!