Readers of Tom Philpott’s Military Update column sound off.

Special Review Board To Reexamine Medical Discharges

When I went through my medical discharge from the Army in 2005, one of the medical conditions listed on my medical evaluation board paperwork was Post-Traumatic Stress Disorder. But right beside "PTSD" was the word "resolved."  I was rated on two other conditions at 0 percent disabled. After evaluation by the VA, I’ve been rated 40 percent disabled and 30 percent of that due to PTSD!

Is there anything I can do about this [rating disparity]?  I hear so much about how the military is covering up PTSD cases with findings of "personality disorder."  I also heard a rumor there’s an investigation going on into this and that investigators are back tracking to find cases like mine to hopefully fix the problem.   True?

MATTHEW A. FISHER
Army, Veteran 2001-2005

Under a law enacted in January, the Department of Defense is establishing a special board to review military disability determinations for former servicemembers separated since Sept. 11, 2001, with ratings of 20 percent or less. [A 30-percent rating qualifies a member for DOD disability retirement, which means a lifetime annuity, rather than a lump-sum payment, and access to retiree benefits including lifetime health care.]

The Air Force has been tasked to operate and manage the "Physical Disability Board of Review." Once the PDBR is established, qualified veterans who want disability ratings reviewed can apply. But the PDBR also will have authority to decide itself to review an individual’s case if the veteran provides his or her consent.  

An Air Force spokesman said his service is working out details for setting up the board and how qualified veterans can apply.  That information will be announced as soon as available. – Tom Philpott.

TAX CONSEQUENCES OF IU BACK PAY

I'm one of the "IU" retirees [given "individual unemployability" status by the VA] who should receive lump sum back retirement pay later this year.

If the intent of Congress is to treat all fully disabled non-combat veterans equally, by giving us our full retired pay retroactive to the date when others started receiving theirs, then they also need to ensure that we're all taxed equally and fairly. Looking ahead to filing my 2008 income tax, I've figured out that the lump-sum payment will place a very heavy tax burden on me.

First, it will place me in a much higher tax bracket. Second, it will cause me to exceed the earnings limit on Social Security, which will cause me to pay taxes on almost all of my Social Security where otherwise I would have paid none.

Comparing my actual income and taxes since Jan. 1, 2005, with what I would have been paid if I had received my full military retirement pay for the same period, I have calculated that the lump sum payment this year will cause my total federal income taxes for that period to be about $7,000 higher than if I had received my full retired pay monthly. And I haven't even looked at my state income tax yet.

The 50,000 veterans in line to receive retroactive IU payments need to know they might get hit hard in higher taxes, especially taxes on Social Security. Do you know if DFAS has received any guidance on how to handle the taxes for these lump sum payments?

WILLIAM JOHNSON
Via e-mail

Congress restricted the timing of the IU retroactive payments so that they won’t begin until after Oct. 1, 2008.  The Defense Finance and Accounting Service told us the lump sum catch-up payments won’t be made until sometime after Nov. 3, 2008, and couldn’t be more specific.

The law that authorized the back payment does not provide any special tax protection, so veterans who qualify will get their retroactive payments in a lump sum. DFAS officials note that these are Concurrent Retirement and Disability Payments (CRDP), which normally are taxable unless your retired pay is non-taxable.

Because the payments represent military retired pay previously offset, they are treated for tax and Social Security purposes the same as retired pay.  For most recipients, it will be taxable income at the time it is received, rather than for the time it was retroactively accrued.

Each state has its own rules regarding the taxability of military retired pay for state income tax purposes. The Armed Forces Tax Council recommends that affected members contact their tax advisor for suggestions on how to lower their tax liability from the lump sum payment. -- T.P.

UNUSED MGIB

If I have already started to use my Montgomery GI Bill benefits, but I qualify for the Post-9/11 GI Bill with two tours in Iraq and Afghanistan, can I still transfer over to the new program in August 2009 when it becomes available?

CHARLES DOUGHERTY
Staff Sergeant

You will be able to transfer into the new program any months of MGIB benefits that you haven't used. – T.P.

HOUSING ALLOWANCE ADEQUACY

I am writing to find out who I might speak to regarding the appropriateness of Basic Allowance for Housing rates.

 I have 17-20 full time active duty staff and believe the local BAH to be below standards for the housing market here in the Pacific Northwest.

My folks live in Portland, Ore., and Vancouver, Wash., very expensive areas.  Coming from California, I know San Diego has a much higher BAH rate.  Yet housing here is very expensive and my folks live in low rent districts.  If given a higher, more appropriate BAH rate, they could live closer to the reserve center.

JAMI MASON
Commander, USN
Portland, Ore.

Questions about the adequacy of local BAH should be referred to service BAH representatives.  Contacts can be found online at: http://perdiem.hqda.pentagon.mil/perdiem/bahquestions.html.

With the exception of Air Force, service member can click on the hyperlink to submit their question by email.  Air Force policy is that service members must go through their chain of command on BAH matters.  – T. P.

Letters may be edited for clarity or length.  Write to Military Forum, P.O. Box 231111, Centreville, VA  20120-1111, send e-mail to militaryforum@aol.com or visit www.militaryupdate.com.