Military Medical Retirement versus VA Disability

Military medical retirement is intended to compensate for a military career cut short because of disability. Typically, a medical retirement is issued when a medical condition is severe enough to interfere with the proper performance of your military duties. VA disability compensation is intended to compensate for disabilities that interfere with civilian employment, and it is separate from medical military retirement pay.

Military retirement medical evaluation boards

When a military doctor determines that you have a medical condition that may interfere with the performance of your military duties, he refers the case to a Physical Evaluation Board (PEB).

This medical board consists of active-duty physicians (not personally involved in your medical care) who review the clinical case file and decide whether you should be returned to duty or medically separated or retired using the published medical standards for continued military service.

You can see the list of medical conditions that are generally considered incompatible with continued military service online at About.com.

The PEB’s recommendations are forwarded to a central medical board that uses four factors to determine whether your disposition is fit for duty, separation, permanent retirement, or temporary retirement.

  • Whether you can perform your military job

  • Your assigned disability rating

  • The stability of your medical condition

  • Years of active-duty service in the case of preexisting conditions

You can appeal the central medical board’s decision, and you’re allowed to have legal counsel at these hearings.

The military is required by law to rate your disability using the “Department of Veterans Affairs Schedule for Rating Disabilities.” However, DOD Instruction 1332.39 allows the military to modify the rating schedule, based on conditions that are unique to the military. Ratings can range from 0 to 100 percent, rising in increments of 10.

Don’t confuse disability ratings granted by the military with disability ratings awarded by the VA. While both the DOD and the VA use the “Department of Veterans Affairs Schedule for Rating Disabilities,” not all the general policy provisions set forth in the rating schedule apply to the military. Consequently, disability ratings may vary between the two.

The military rates only conditions determined to be physically unfitting, compensating for loss of a military career. The VA may rate any service-connected impairment, thus compensating for loss of civilian employability.

Types of military medical retirement disposition

Depending on several factors, the central medical board may order that you be returned to duty, medically separated without severance pay, medically separated with severance pay, permanently medically retired, or temporarily medically retired. Here’s the lowdown on each of these:

  • Fit for duty: The board judges you to be fit for duty when you can reasonably perform the duties of rank and military job. If the board finds you to be medically unfit to perform the duties of your current military job, it can order medical retraining into a job you are medically qualified to perform.

  • Separated without severance pay: Separation without severance benefits occurs if your medical condition existed prior to service, wasn’t permanently aggravated by military service, and you have less than eight years of active-duty service (or equivalent Guard/Reserve retirement points).

    It is also imposed if you suffered your disability while you were absent without leave (AWOL) or while engaged in an act of misconduct or willful negligence.

  • Separated with severance pay: Medical separation with severance pay occurs if you’re found unfit for duty, have fewer than 20 years of service, and the board awards a disability rating of less than 30 percent. Disability severance pay equals 2 months of basic pay for each year of service not to exceed 12 years of service.

    You may also be eligible to apply for monthly disability compensation from the VA if it determines your disability is service connected.

    If you are approved for disability compensation from the VA, the law requires the VA to recoup your military severance pay before paying your disability compensation benefits.

  • Permanent medical retirement: Permanent disability retirement occurs if you are found unfit, and your disability is determined permanent and stable and is rated at a minimum of 30 percent. You may also be eligible for VA disability compensation if the VA determines your medical condition constitutes a service-connected disability.

    You can also be medically retired if you have 20 or more years of military service, regardless of disability rating. For National Guard and Reserve members, this means at least 7,200 retirement points.

  • Temporary medical retirement: Temporary medical retirement occurs if the board finds you are unfit and entitled to permanent medical retirement except that your disability is not stable for rating purposes. Stable for rating purposes refers to whether the condition will change within the next five years so as to warrant a different disability rating. When this happens, you are placed on the temporary disability retirement list (TDRL).

    When on the TDRL, you are subject to medical reevaluation every 18 months and limited to 5 years max on the TDRL. At the 5-year point, if not sooner during a reevaluation, you are removed from the TDRL and either found fit and returned to duty, or permanently medically retired.

Military medical retirement pay compensation

For permanent retirement or placement on the TDRL, your compensation is based on the higher of two computations:

  • Your disability rating times your retired pay base, or

  • Two and a half times your years of service times your retired pay base.

Veterans on the TDRL receive no less than 50 percent of their retired pay base.

The computation of your retired pay base depends on when you joined the military. If you joined prior to September 8, 1980, retired pay base is computed from your military basic pay at the time of medical retirement. For those who entered after September 7, 1980, it’s the average of the high 36 months of basic pay.

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