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DoD vows to cut concurrent receipt backlog

The Pentagon’s senior budget official has ordered the director of the Defense Finance and Accounting Service to clear up a major backlog of claims for two disability compensation programs aimed at military retirees.

More than 39,000 claims are pending under the Concurrent Retirement and Disability Payments and Combat-Related Special Compensation programs, and retirees have criticized the delays in processing those claims virtually since the programs were created several years ago.

Sen. Ron Wyden, D-Ore., raised concerns about the backlog to Deputy Defense Secretary Gordon England at a hearing Tuesday on the Pentagon’s 2009 budget request.

“Tens of thousands of brave men and women ... have waited more than a year and a half for the Defense Finance and Accounting Service to approve the benefits that they earned fighting for our country,” Wyden said. “I know of one veteran in my state who died waiting for his claim to be processed.

“Thousands of new claims are coming in,” he said. “So can you point out specifically to me and to the committee how, under your budget, you’re going to turn this around and get at this huge backlog of claims?”

Pentagon Comptroller Tina Jonas, who oversees DFAS, said she recently became aware of the problem and acknowledged that Wyden’s complaint was on target.

“I asked the director of the Defense Finance and Accounting Service, Zack Gaddy, to triple the number of people on this effort, and he is doing so,” Jonas said. “You’re absolutely right — the backlog needs to be cleaned out. I told him that we’d like to have it done by April.”

A manpower shortage had slowed the effort, Jonas said in a brief interview the following day after a separate House hearing on the 2009 defense budget plan.

“They didn’t have enough people on it to get it done in an expeditious way,” she said, adding that Gaddy has assured her the backlog will be cleared out.

At the Senate hearing, Wyden pressed Jonas to confirm that the backlog would be cleared up by April. Jonas said she has directed DFAS to get “the oldest claims done by April ... they’re on track to try to get that done.”

“I have directed him to … get it cleaned out.”

Jonas offered to provide weekly progress reports, which Wyden said he would welcome.

The Concurrent Retirement and Disability Payments program is phasing out a law enacted in the late 19th century that required disabled military retirees to forfeit a dollar of military retired pay for every dollar received in veterans disability compensation.

The phase-out is occurring over a 10-year period that began in 2005 and will end in 2014. At that point, these disabled retirees will receive full military retired and VA disability payments, with no offset — in other words, full “concurrent receipt” of both.

CRDP, which is taxable, covers retirees with service-connected disabilities rated at 50 percent to 90 percent by the Department of Veterans Affairs. When CRDP began, retirees rated 100 percent disabled also were under the 10-year offset phase-out schedule, but in 2005, Congress amended the program to give these most seriously disabled retirees full, immediate concurrent receipt.

Combat Related Special Compensation is a separate program under which a special, nontaxable payment replaces the entire retired pay offset for retirees with any VA-rated disability that is the direct result of combat or combatlike training. In effect, all retirees under CRSC have full concurrent receipt of military retired pay and VA disability compensation.

Each program is expanding under the 2008 Defense Authorization Act.

Eligibility for CRDP now extends to so-called “individual unemployability” retirees with service-connected disabilities. “IU” retirees have formal VA disability ratings of less than 100 percent but are nevertheless considered fully disabled because their medical conditions prevent them from holding a job.

They will get full concurrent receipt of retired pay and VA disability payments retroactive to Dec. 31, 2004, and will no longer be subject to the 10-year phase-out of the offset in retired pay. However, Congress has delayed the effective date for this provision. Payments will not be made until Oct. 1 of this year.

CRSC also is expanding. Previously, retirees had to have at least 20 years of service to be eligible. Effective Jan. 1, the program also covers those who are medically retired by the military with fewer than 20 years of service. They still must meet all other eligibility criteria, to include having disabilities that are the direct result of combat or combatlike training.

The Pentagon maintains a Web page with information on both programs, as well as service contacts for filing claims.