Understanding Military Medical Retirement and How It Works

Military medical retirement, also known as Chapter 61 retirement, military disability retirement, or DoD disability retirement, is one of several military retirement options available for service members. The military medical retirement plan is offered to eligible service members with a disability that prevents them from performing their military duties.

This guide will help break down how military disability retirement works, which service members qualify, and how much money you can expect if you are medically discharged.

Military Medical Retirement vs. Regular Military Retirement

To qualify for regular military retirement, active duty military members must complete at least 20 years of active service (unless they qualify for early retirement under TERA rules). Members of the Guard or Reserves must have a minimum of 20 Good Years of service to qualify for retirement benefits.

Medical retirement in the military is based on a service member’s inability to perform duties due to an injury or medical condition. If the service member qualifies, they can medically retire regardless of their age or years of service.

How Does Military Medical Retirement Work?

To qualify for medical retirement, you must undergo a medical evaluation developed by the DoD and the VA called the Integrated Disability Evaluation System (IDES). 

Regardless of which system a service member chooses, they will begin the process with a referral to the Medical Evaluation Board (MEB) for a disability assessment. The MEB will determine if the service member’s conditions meet the following qualifications:

  1. The condition is service-connected
  2. The condition makes the service member unfit for duty
  3. The condition should be rated for compensation

If the service member meets at least one of the conditions, the MEB will submit the case to the Physical Evaluation Board (PEB). The PEB will decide if the service member’s condition meets the requirements for a service-connected rating, determine if the member is unfit for duty, and decide if the member qualifies for medical retirement. 

If at least one condition is met, the service member will receive a military disability rating, indicating the severity of the impairment. This rating is used to determine two factors: 

  1. If the service member will be medically separated from service or medically retired 
  2. The type of benefits they will be eligible for

Who Qualifies for Military Medical Retirement?

After going through the DoD disability process and receiving a rating, a service member will either qualify for military separation or retirement: 

Years of Active Service Disability Rating Qualify For
Less than 20 Below 30% Medical Separation
Less than 20  30% or higher Medical Retirement
20 or more Any Medical Retirement

If your disability existed before you entered the armed forces, you will need to prove that your military service made the condition worse. Otherwise, you may be recommended for discharge without any military benefits.

DoD Disability for Medical Separations

Service members who are medically separated receive a single lump-sum severance payment. 

The payment is equal to two months of basic pay for each year of military service, with a minimum of three years and a maximum of 19 years. Service members are credited with six years of service for a disability incurred in the line of duty in a combat zone or while performing combat-related operations. So, if a service member only served two years, the payment is calculated for either three or six years of service, depending on the nature of their qualifying disability. 

Typically, medically separated service members do not receive any other benefits for their DoD disability. However, they are eligible to file a disability claim with the VA.

Note: Service members who are medically separated from the military and receive medical separation pay are eligible to receive VA disability compensation. However, the VA disability compensation payments will be offset by the amount of your medical separation pay. In most cases, the VA will withhold your VA disability compensation payments until the amount of medical separation pay you received has been fully recouped. 

For example, if you receive a $20,000 medical separation payment, the VA will withhold the first $20,000 in disability compensation you receive. After that amount has been recouped, you will receive your full disability compensation payment.

Types of Military Medical Retirement

When a service member is medically retired, they receive all the same benefits as a service member who retired regularly from the military. This includes medical care and a monthly retirement payment for the rest of their life.

Depending on the service member’s branch, they may be placed on either the Temporary Disability Retired List or the Permanent Disability Retired List. Service members on these lists receive all the benefits of an active-duty military retiree. If you meet additional requirements, you may also qualify for Combat-Related Special Compensation (CSRC) or Concurrent Retirement Disability Pay (CRDP).

Temporary Disability List

If you qualify for medical retirement and have a disability that’s not permanent, you may be placed on the Temporary Disability List (TDRL). You’ll still receive disability retirement benefits, but only until your injury or condition improves and you can return to duty.

While on the TDRL, you must complete a physical examination at least once every 18 months. If you fail to do this, your Branch of Service can remove you from the TDRL list, and your retired pay will be suspended until your examination has been completed.

If placed on the TDRL prior to January 1, 2017, you may remain on the list for up to five years if your condition does not change during that time. If placed on the TDRL on or after January 1, 2017, you may stay on the list for up to three years if your condition does not change during that time. If at any time you are found fit for duty, you will be removed from the TDRL and returned to active duty.

If your disability stabilizes but is rated at 30% or greater, you will be transferred to the Permanent Disability Retired List. If your disability stabilizes and is rated at less than 30% and you do not have 20 years of service, you will be discharged from the TDRL with severance pay.

Permanent Disability Retired List

If your disability is permanent and rated at 30% or greater, or you have 20 or more years of service, you may be placed on the Permanent Disability Retired List (PDRL).

You will receive all the benefits of a regular military retiree. Your retired pay will be determined by your disability percentage or your years of active service, whichever is more beneficial to you. 

If you were transferred from the TDRL to the PDRL, your retired pay will be recalculated using your most current disability rating.

Medical Retirement for Reservists

Medical retirement for reservists is similar to active duty, but there is a difference in how the DoD determines service connection for reservists compared to active duty members. For the disability to count as service-connected, it must have occurred directly in the line of duty. It must have occurred while on active duty or during active duty training and includes conditions that were service-aggravated by these activities. The only conditions that can be considered service-connected that occurred during inactive duty training are injuries, heart attacks, and strokes.

How Much Do you Get if You are Medically Retired from the Military?

There are a few considerations when determining military medical retirement pay. However, the basic formula is:

Pay Base x Disability or Retirement % = Monthly Payment

If you entered the military before September 8, 1980, your retirement pay base is equal to your salary during your final full month in the service. On the other hand, if you entered the military on or after September 8, 1980, your retirement pay base is equal to the average of your 36 highest-paying months.

When calculating your disability or retirement percentage, you can choose the higher of:

  • Your total years of service multiplied by 2.5% or 
  • Your total combined military disability rating

In both cases, the maximum percentage limited by law is 75%. If you have a 100% disability rating, you can only calculate your pay using 75%. This is due to the regular retirement maximum of a 30-year cap at 75%, and you can never exceed the maximum amount for retirement. However, the minimum percentage is 50% while on the TDRL.

DoD Disability and VA Disability

It’s very important to understand that military medical retirement is different from VA disability. Military disability retirement is handled by the U.S. Department of Defense (DoD) and takes into account your ability to perform military duties. The purpose of medical retirement is to support you for your career ending early. 

VA disability is handled by the Department of Veterans Affairs (VA) and is solely based on an injury or condition. The purpose of VA compensation is for your loss of civilian earnings after service and the functional loss resulting from your disability.

Typically, veterans cannot receive both military retirement pay and VA disability pay. Instead, the money for VA disability is subtracted from the amount paid by the DoD. This is because most DoD money is taxable, and VA money is non-taxable. So, it’s actually for the service member’s benefit. However, there are instances where exceptions occur, such as Combat-Related Special Compensation (CSRC) or Concurrent Retirement Disability Pay (CRDP).

Military Medical Retirement Can Be Complicated

Every situation is unique. It’s a good idea to get assistance if you are going through the Medical Evaluation Board (MEB) or Physical Evaluation Board (PEB) process. Speak with your medical representatives to understand your medical condition and your options for remaining in the military. It’s also a good idea to create an appointment with your Human Resources or personnel office for help understanding how your situation may be impacted by the MEB or PEB process. 

You can also create an anonymous profile and request help at the PEB Forums. You can find many experts on the PEB process and communicate with members who have gone through this process.  

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