There are many inequities within the various incremental concurrent receipt changes Congress has passed in recent years. But none compares with the refusal to consider equal treatment for military members whose service-connected disabilities forced them into medical retirement short of attaining 20 years of service.

These “Chapter 61” retirees (the chapter of law covering military disability retirement) are stuck with an outdated label that’s now at odds with newly revised retired pay laws. Under the old concept, there were two kinds of retirements — longevity retirement and disability retirement. Military records assign all retirees one label or the other. The fundamental concept of concurrent receipt is that retired pay is earned by longevity of service, and disability compensation is payment for reduced quality of life and loss of function and future earnings.

None of the original concurrent receipt legislation covered anyone who had less than 20 or more years of service. Why? By definition, they weren’t eligible for longevity retirement. Until the 20-year point, any retirement had to be for disability.

In the past, the only practical issue was the pay level, not what it was called. Disability retirees were seen as receiving higher-value compensation. Their retired pay amount was their disability percentage times their basic pay — which usually exceeded the service-based formula of 2.5 percent times years of service and was tax-free as well.

But new concurrent receipt legislation has raised a couple of practical issues that change the traditional view of disability retired pay. First, some members with more than 20 years of service are retired under Chapter 61, and their disability retired pay often exceeds the amount they would have earned by service alone.

In authorizing concurrent receipt for such members, Congress exempted from the VA disability offset only the amount of retired pay the member would have earned by service alone, independent of any disability. The rest of their retired pay was deemed disability compensation from DoD and remains subject to dollar-for-dollar offset for any VA disability compensation.

The logic behind this is that service-based retired pay is earned in its own right, but retirees shouldn’t be able to claim disability compensation from both the military and the VA for the same disability. By passing this law, Congress validated that part of what’s called disability retired pay is, in fact, earned by service.

The second new reality is that some members are now eligible for retired pay with 15 to 19 years of service, without any disability. These Temporary Early Retirement Authority (TERA) retirees were asked to take early retirement (usually under an implied threat of involuntary separation if they didn’t) to help the services achieve rapid force reductions in the early to mid 1990s. Congress recognized these servicemembers’ earned retired pay status by including them in the 10-year phase-in of concurrent receipt payments if they have VA disability ratings of 50 percent or more. So some parts of military retirement law have been revolutionized, but others have some catching up to do.

Can we honestly say that a Chapter 61 retiree with 20 years of service earned part of his retired pay by service, but one who was forced into medical retirement by a combat or other disability with 19 years and 11 months didn’t? Can we say that a 20-year retiree with a 10-percent combat disability deserves relief from the disability offset, but one with 19 years and 11 months of service and a 100 percent combat-related disability rating doesn’t? Can we assert with integrity that a TERA retiree with 15 to 19 years of service earned his retired pay, but a military member forced by a severe service-connected condition into medical retirement with 15 to 19 years didn’t earn it?

The answer to all three questions clearly is a resounding “no.”

What we have here is a vesting issue. Normally, military retirement vests at 20 years for good reason. With unique military conditions of service, the strong “pull to 20” is needed. If servicemembers could take part of their retired pay with them at 10, 12, or 14 years, the pull to 20 would be much weaker, and we’d have many more people leaving service rather than take an unattractive assignment, third or fourth deployment, etcetera. The trade-off for 20-year vesting is the ability to retire with an immediate annuity, lifetime health coverage, and other benefits after 20 or more years of service.

But the pull to 20 is irrelevant when a servicemember is forced into retirement by a service-caused medical condition. In such cases, the member is vested in retired pay, and part of that retired pay is for service rendered. It’s not just for the disability.

How much should be vested as service-earned retired pay and therefore not subject to offset for VA disability compensation? MOAA’s answer: the same proportion that’s already established in law for Chapter 61 retirees with more than 20 years of service — 2.5 percent of the applicable basic pay base times years of service. Under that formula, a person with 15 years of service would be vested at three-fourths the amount of the 20-year member, with proportionally less for shorter service.

Should there be a minimum level of service for military members to be considered vested if a service-connected disability forces them into involuntary medical retirement? In the civilian world, the normal standard is five years — by which time most military members will have served past their initial active duty commitment.

So whether we call the issue “concurrent receipt,” “the disabled veterans tax,” or any other term, the fundamental concept is one of vesting. Military retired pay is earned by service, and it should be vested, proportional to service rendered, for members forced into medical retirement by disabilities incurred while serving their country.

Col. Steve Strobridge, USAF-Ret., director of MOAA government relations