Editor’s note: This article by Jim Absher originally appeared on Military.com, a leading source of news for the military and veteran community.
Military retirees who are eligible for both Concurrent Retirement and Disability Pay (CRDP) and Combat Related Special Compensation (CRSC) can choose which entitlement they prefer to receive during Open Season, which runs Jan. 1-31, 2022.
If you are eligible to participate in Open Season, you should have received a letter detailing the benefits of each entitlement by mail earlier this month. Along with the letter, you'll receive an Open Season Election Form, which allows you to choose the type of payment you wish to receive. Federal law prohibits receiving both CRDP and CRSC.
You might base your decision on the difference in monetary value or on the effect each entitlement will have on your taxable income. You can read Frequently Asked Questions about the CRSC and CRDP programs to learn more. In addition, you can view a chart which explains the differences between CRDP and CRSC.
When you review the comparison table, you'll notice several differences between CRDP and CRSC. Before making your decision, you may want to consider how these differences affect you. For instance:
- CRDP is subject to federal taxes; CRSC is not.
- CRDP is subject to division with a former spouse; CRSC is not.
- SBP premiums can be deducted from CRDP, but not CRSC.
If you have questions about how your election will affect your taxes, you should contact your financial advisor or a tax professional.
[MOAA PUBLICATION: Concurrent Receipt: Your Guide to CRDP and CRSC (Exclusive to Premium and Life Members)]
If you feel the information reflected on your form is incorrect, you may contact DFAS Customer Care Center at 800-321-1080 from 0800 to 1700 EST, Monday through Friday. Because Monday is the busiest day, we recommend calling Tuesday through Friday for quicker service.
Forms should only be submitted if you are making a change, if you wish to keep receiving your current benefit you don't need to respond.
Responses must be postmarked by Jan. 31, 2022. If postmarked after this date, the form will not be processed and the current payments will continue.
The Smart Money’s on MOAA
Making sound financial decisions is not always as simple as we would like. PREMIUM and LIFE members can access MOAA's Financial Planning Guide, as well as speak with a MOAA financial expert for additional assistance.