The overall
military disability system works the same for both active duty and reservists, but it’s
different if the veteran put more than 20 years in the military. I discussed
the system for active duty members with more than 20 years in the military
last week, so check out
that blog for those specifics.
As for reservists:
All reservists do not
receive any retirement benefits from the DoD until they reach 60 years of age. This age is
decreased by three months for every three-month period spent mobilized, but can
never lower past age 50. The amount of benefits they receive are based on the
number of points they have accrued from the amount of activity they did as a
reservist.
If the reservist put
more than 20 qualifying years (20 years with at least 50 retirement
points/year) of service in, they will receive their full retirement benefits
from the DoD once they reach 60 years of age. For the time in between their
retirement from the reserves and their 60th birthday, a reservist
will not receive any benefits from the DoD unless he has a disability.
If he has
a disability, the DoD will give him a
military disability rating and give him the same benefits as all other
disabled American veterans. Once he reaches 60 years of
age, however, the DoD will then pay him either the standard reservist retirement
benefits he has earned
or the disability benefits, but he won’t receive
both, whichever is higher.
So if Susy retires
from the reserves after 20 qualifying years at the age of 40 with a disability,
she will receive standard disability compensation from the DoD, and nothing
else, for 20 years (until she turns 60 or her qualifying age). At that time, she will either switch
to her retirement pay or continue with her disability pay, whichever is more.
So if she receives $500/month for her disability, and then starts receiving
$800/month for retirement pay, her disability payments will stop and she’ll
just receive the $800/month for her retirement.
VA disability compensation is exactly the same for every veteran, no matter how long they are in the military or whether they were active duty or reserves.
VA disability benefits are solely based on the rating that they give the conditions. If a veteran with 20 years has a 20% rating, and a veteran with 5 years also has a 20% rating, they will both get the exact same compensation since they received the same 20% rating.
Now when you combine
DoD compensation with VA compensation, any
compensation you receive from the VA for a disability is subtracted from the
amount of monetary benefits you receive from the DoD.
So if you receive
$400/month from the DoD for anything, and then the VA starts giving you
$300/month for disability, the DoD amount will decrease to $100/month (400 –
300 = 100). You still get the larger amount, but the VA will pay a part of it
instead of the DoD giving it all.
While confusing, this
is actually very beneficial to you since any money you receive from the DoD is
taxed, while any money you receive from the VA is not. So instead of getting
taxed on $400, you’ll only be taxed on $100. You still get the other $300, but
it isn’t taxed. A pretty good perk, if you ask me.
This will happen any
time you are receiving money from both the VA and the DoD.
