Mandatory Spending

Function 600 - Income Security

Eliminate Concurrent Receipt of Retirement Pay and Disability Compensation for Disabled Veterans

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of dollars 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024
Change in Outlays 0 -10 -10 -10 -12 -13 -13 -15 -15 -14 -42 -112

Note: This option would take effect in October 2015. Estimates are relative to CBO’s August 2014 baseline projections.

Two groups of retired military personnel are allowed to receive their full retirement pay from the Department of Defense without having such pay reduced dollar for dollar by the receipt of any disability compensation from the Department of Veterans Affairs (VA)—a benefit often called concurrent receipt. The first group consists of those whose disabilities arise from combat; they are eligible for combat-related special compensation. The second group consists of those who have a longevity-based retirement and have received a VA disability rating of at least 50 percent; they are eligible for what is termed concurrent retirement and disability pay. Under this option, those forms of concurrent receipt would be eliminated.