Should I Take Drill Pay or VA Compensation

• Many service members are currently in the National Guard or Reserves and

• The key is to compare the daily rate of pay from both

E 4 with 6 years of service 80% VA disability Married with one dependent

O 3 with 8 years of service 90% VA disability Married with one dependent

• Service members may use VA Form 21 -8951 -2 to waive the

• The VA will send the member a letter stating the start and

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Should I Take Drill Pay or VA Compensation? http: //www. rcretirement. com

• Many service members are currently in the National Guard or Reserves and are receiving VA disability compensation. • Drill pay is taxable while VA compensation is not. • Service members often confuse nontaxable as better. This is not always the case. • Each member must make a decision whether to receive drill pay or VA compensation. By law, they cannot receive both. • Don’t confuse this with Concurrent Retired and Disability Pay (CRDP) for retirees. We are discussing serving members only. http: //www. rcretirement. com

• The key is to compare the daily rate of pay from both sources not the monthly amount. • Service members must be reminded that without military pay they will not accrue retirement points. • Without points, they will not earn qualifying years for retirement purposes. • NOTE: Qualifying retirement years are used to determine other service-connected benefits (awards, VA education benefits, etc). http: //www. rcretirement. com

E 4 with 6 years of service 80% VA disability Married with one dependent Monthly Military Base Pay: $2, 535. 60 Drill Pay: $338. 08 Daily Rate: $84. 52 63 Days of Pay: $5, 324. 76 Monthly VA Compensation (Veteran with Spouse): $1, 686. 13 Daily Rate: $56. 20 63 Days of Pay: 3, 540. 87 Difference: $1, 783. 89 Difference after taxes and SGLI: $104. 70 Even without factoring in the effects of taxes, we can see a substantial difference in the daily and annual rates of pay. After we compute taxes, receiving drill pay is most likely still the best choice for this individual. Based on 2017 military pay scale and December 2016 VA compensation table. http: //www. rcretirement. com

O 3 with 8 years of service 90% VA disability Married with one dependent Monthly Military Base Pay: $5, 940. 90 Drill Pay: $792. 12 Daily Rate: $198. 03 63 Days of Pay: $12, 475. 89 Monthly VA Compensation (Veteran with Spouse): $1, 894. 71 Daily Rate: $63. 16 63 Days of Pay: 3, 978. 89 Difference: $8, 497. 00 Difference after taxes and SGLI: $5, 030. 03 Even without factoring in the effects of taxes, we can see a substantial difference in the daily and annual rates of pay. After we compute taxes, receiving drill pay is most likely still the best choice for this individual. Based on 2017 military pay scale and December 2016 VA compensation table. http: //www. rcretirement. com

• Service members may use VA Form 21 -8951 -2 to waive the 63 days of VA compensation they received in order to keep drill pay. • The form must be certified by the unit commander or designee and submitted to the VA within 60 days of the end of the fiscal year. http: //www. rcretirement. com

http: //www. rcretirement. com

• The VA will send the member a letter stating the start and end dates of the suspension. • After the end date, the VA will resume payment of disability compensation. http: //www. rcretirement. com