USSVI Veterans News 
Posting Date: 21 December, 2005
From:   John Dudas
DFAS Combines Pay Systems


The updated Retiree Account Statement has caused confusion among some retired members who receive Concurrent Retirement Disability Payments.

The Defense Finance and Accounting Service sent out a letter to customers who are drawing CRDP advising that the two payments (regular retired pay and CRDP) are being combined.

This gives them one payment from DFAS and a second from the Department of Veterans Affairs.

Officials point out that the confusion comes from retired members noticing a change in the VA waiver line of the pay statement. Normally that means the VA payment changed. In this case, it just means that the accounting system is catching up with the actual amount of retired pay that is offset by the retiree's VA compensation.

Now that CRDP is being incorporated into disabled retirees' RASs, the statements will show a dollar-for-dollar decrease in the waiver amount and a dollar-for-dollar increase to their taxable retired pay.

The bottom line, officials point out, is that disabled retirees are still receiving the same pay amounts from both the VA and DFAS that they have in the past.

They're just getting both retired pay and CRDP in a single check now, and that combined amount is now being shown on the RAS.

Some beneficiaries could see a reduction in net take-home pay, however, because the CRDP in the regular retired pay is taxed at the same rate as the rest of their retired pay.

Before this change, it was withheld at a straight 10 percent rate for all retirees.