In This Section |
This section contains the following topics:
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1. Prohibition of Concurrent Payment of VA Benefits and MRP
Introduction |
This topic contains information on the prohibition of concurrent payment of VA benefits and MRP, including
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Change Date |
July 12, 2022 |
VI.ii.4.A.1.a. Restriction on the Concurrent Payment of VA Benefits and MRP |
38 U.S.C. 5304(a) provides a statutory restriction on the concurrent payment of military retired pay (MRP) and the following types of Department of Veterans Affairs (VA) benefits:
Notes:
Important:
Reference: For more information on the concurrent payment of disability compensation and MRP, see
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VI.ii.4.A.1.b. Retainer Pay as a Form of MRP |
Naval and Marine Corps enlisted personnel with 20 or more years but less than 30 years of service may request transfer to the Fleet Reserve or Fleet Marine Corps Reserve and receive retainer pay.
Retainer pay and MRP are similar in that neither may be awarded concurrently with VA disability compensation, Section 306 Pension, or Old Law Pension. The retainer pay, as a form of MRP, must be waived under 38 CFR 3.750 before a Veteran may receive any of these three VA benefits. |
VI.ii.4.A.1.c. Prohibition Under 38 CFR 3.750 of Combined Benefits to Exceed the Amount of the Greater Benefit |
38 CFR 3.750(c) prohibits the total of the monthly payments (combined VA benefits and MRP) to the Veteran from exceeding the greater amount of the following benefits:
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VI.ii.4.A.1.d. Unrestricted Election, Reelection, or Waiver of MRP |
Per 38 CFR 3.750(d), there is no restriction on the right of election, reelection, or waiver of MRP by
Note: Previous agencies of the Coast and Geodetic Survey and Environmental Science Services Administration were incorporated into NOAA. |
VI.ii.4.A.1.e. Advantage of Waiving MRP |
Veterans frequently waive only so much of their MRP or retainer pay as is equal to the amount of disability compensation, Section 306 Pension, or Old Law Pension to which they are entitled.
Since disability compensation, Section 306 Pension, and Old Law Pension are not taxable benefits, but MRP from the Armed Forces based on age or length of service is taxable, there is an obvious advantage for a Veteran to waive MRP.
Note: When MRP is waived in claims for Section 306 Pension or Old Law Pension, 90 percent of the waived MRP counts as income following the 10-percent statutory exclusion, per 38 CFR 3.262(e)(2) and 38 CFR 3.262(h). |
VI.ii.4.A.1.f. Determining Whether a Veteran Receives MRP |
To avoid overpayments, carefully examine the following information sources to determine if MRP has been granted:
If it cannot be determined whether a service department is paying MRP,
Note: VA discontinued the use of
References: For more information on
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VI.ii.4.A.1.g. Verifying the Amount of MRP a Veteran Receives |
MRP and Survivor Benefit Plan payments may be verified on the BIRLS MISCELLANEOUS INFO screen in Share. This screen displays the MRP rate for the current and previous year.
If the Veteran was recently discharged, or MRP information is not available in Share,
References: For more information on
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VI.ii.4.A.1.h. Deferring Award Action in the Absence of an Election or Waiver |
If a Veteran in receipt of MRP, including one on the Temporary Disability Retirement List (TDRL), becomes entitled to disability compensation, take no award action in the absence of an election or an effective waiver.
Reference: For more information on removal of a Veteran from the TDRL, see M21-1, Part VI, Subpart ii, 4.B.6. |
2. Obtaining an Election or Waiver of MRP
Introduction |
This topic contains information on obtaining an election or waiver of MRP, including
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Change Date |
July 12, 2022 |
VI.ii.4.A.2.a. Determining Whether a Waiver of MRP Is Required |
Veterans entitled to MRP must waive their MRP in order to receive disability compensation.
Exception: Per 10 U.S.C. 1414, 38 U.S.C. 5305, and 38 CFR 3.750(c), a waiver of MRP is not required when a Veteran is eligible for full Concurrent Retirement and Disability Pay (CRDP).
Note: The renouncement of disability compensation, as discussed in M21-1, Part X, Subpart iv, 4, is not the same as not waiving MRP based on receipt of disability compensation.
Reference: For information on determining whether a Veteran is eligible for full CRDP, see M21-1, Part VI, Subpart ii, 4.A.2.f. |
VI.ii.4.A.2.b. Accepting an Application for Benefits as an Election or Waiver |
Per 38 CFR 3.750(c), a Veteran’s application for VA benefits on VA Form 21-526(edition of November 1977 or later), VA Form 21-526c, or VA Form 21-526EZ constitutes an election or waiver in the absence of a specific statement to the contrary.
Note: VA discontinued the use of VA Form 21-526 on February 19, 2019, and VA Form 21-526c on May 1, 2019. Waivers/elections Veterans made on the forms prior to the date VA rescinded them remain valid.
Reference: For more information on handling discontinued forms, see M21-1, Part II, Subpart i, 2.B.4.e.
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VI.ii.4.A.2.c. Using VA Form 21-651 to Obtain an Election or Waiver |
Use VA Form 21-651, Election of Compensation in Lieu of Retired Pay or Waiver of Retired Pay to Secure Compensation From Department of Veterans Affairs (38 U.S.C. 5304(a)-5305), when it is necessary to obtain the Veteran’s or fiduciary’s signature on the election or waiver.
When furnishing the form to the Veteran or fiduciary, complete the first five items. The form includes instructions to the Veteran or fiduciary to sign and date the form and return it to the VA office shown in Block 1 of the form. |
VI.ii.4.A.2.d. Interacting With RPCs to Certify an Election or Waiver |
Retired pay centers (RPCs) accept award action by VA as certification that an election or waiver is on file with VA without requiring “hard copy” documentation.
VA is responsible for providing RPCs with a completed copy of one of the forms listed in M21-1, Part VI, Subpart ii, 4.A.2.e (or other relevant documentation) only upon receipt of a specific request. Do not routinely forward election or waiver forms to RPCs.
Note: When an RPC does request a copy of VA Form 21-651 or other form constituting an election or waiver, the responding RO must prepare a locally generated letter that shows the amounts and effective dates of VA’s payment of compensation.
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VI.ii.4.A.2.e. Action to Take Upon Receipt of an Election or Waiver and Establishment of Entitlement to VA Benefits |
Take award action in accordance with instructions in M21-1, Part VI, Subpart ii, 4.B.1 when VA
Notes:
Reference: For more information on handling discontinued forms, see M21-1, Part II, Subpart i, 2.B.4.e. |
VI.ii.4.A.2.g. Documenting Eligibility for Full CRDP |
After determining a waiver of MRP is not required because a Veteran is eligible for full CRDP, claims processors must upload into the Veteran’s electronic claims folder (eFolder) the documentation described in the right-hand column of the table below as proof the Veteran meets the eligibility requirement listed in the left-hand column.
Reference: For more information on using RCPS, see M21-1, Part VI, Subpart ii, 4.B.3. |
VI.ii.4.A.2.h. Notifying Insurance Service of an Election or Waiver of VA Benefits |
Follow the procedures in M21-1, Part V, Subpart iv, 1.D.2.c to notify Insurance Service of an election or waiver of VA benefits. |
3. Handling a Claim With an Election or Waiver of MRP
Introduction |
This topic contains information on handling a claim with an election or waiver of MRP, including
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Change Date |
September 19, 2019 |
VI.ii.4.A.3.a. Process for Handling a Statement of an Election or Waiver of MRP |
Follow the instructions in the table below when
Exception:
Notes:
Reference: For more information on handling discontinued forms, see M21-1, Part II, Subpart i, 2.B.4.e.
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VI.ii.4.A.3.b. Notifying a Veteran Who Elected to Receive MRP of the Determinations VA Made on Their Claim |
If VA denies a Veteran’s claim because they elected MRP instead of disability compensation, send a locally-generated letter to inform the Veteran of the
References: For more information on
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VI.ii.4.A.3.c. Furnishing VA Form 21-651 and Informing the Veteran of the Restriction on Concurrent Payments |
In addition to taking the actions described in M21-1, Part VI, Subpart ii, 4.A.3.a, when notifying the Veteran of the determination made on the claim,
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VI.ii.4.A.3.d. Effective Date of VA Benefit Payments When a Veteran Waives a Portion of Their MRP |
If Veterans waive a portion of their MRP, the full rate of disability compensation will begin as of the effective date of the reduction of their MRP.
Reference: For more information on the effective date referenced in the preceding paragraph, see VAOPGCPREC 7-2001. |
VI.ii.4.A.3.e. Effect of the Recoupment of Readjustment or Separation Pay on VA’s Offset of Benefits for Receipt of MRP |
The recoupment of a prior award of readjustment or separation pay by a service department does not affect the VA offset for the receipt of MRP.
However, VA may be required to repay amounts of readjustment or separation pay previously recouped by VA. If separation pay was recouped by both VA and the service department, VA may have to refund the amount of separation pay withheld.
Reference: For more information on handling the recoupment of separation or readjustment pay by both VA and a service department, see M21-1, Part VI, Subpart ii, 2.2.i. |
VI.ii.4.A.3.f. Processing a Supplemental Claim VA Receives One Year or More After Denying a Claim Because the Veteran Elected to Receive MRP |
If VA receives the following from a Veteran, one year or more after VA denied entitlement to disability compensation because the Veteran elected MRP, the authorization activity may grant entitlement to disability compensation, based on the most recent rating decision, effective the date of claim:
Exception: Before the authorization activity may grant entitlement to disability compensation for a service-connected (SC) disability that, according to the most recent rating decision, is subject to a future review examination, the
Important: The exception described in the previous paragraph applies only if the date the rating activity selected for the review examination has already passed.
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VI.ii.4.A.3.g. Informing Veterans of Their Eligibility for Ancillary Benefits |
If a rating decision establishes basic eligibility to Dependents’ Educational Assistance (DEA) and/or ancillary benefits, VA must notify Veterans of their eligibility, regardless of whether or not VA ultimately denies the claim because the Veteran elected to receive MRP.
References: For more information on notifying Veterans of their eligibility for
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VI.ii.4.A.3.h. Control Requirement for a Review Examination When Benefits Are Not Paid |
It is necessary to control future review examinations in a case in which monetary benefits are not being paid for compensable disability ratings, that is, a case in which MRP has not been waived.
Rationale: The protective provisions of 38 U.S.C. 110 and 38 CFR 3.951 do not require a concurrent award of monetary benefits.
Note: See VAOPGCPREC 5-1995 for discussion of a situation in which the protection of 38 U.S.C. 110 does not apply. |
VI.ii.4.A.3.i. Establishing the Control for a Review Examination When Benefits Are Not Paid |
If the rating activity determines that a review examination is necessary on a claim in which no monetary benefits are paid, follow the procedures in M21-1, Part IV, Subpart ii, 1.B.1.b or c for establishing control for a future review examination.
References: For more information on
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4. Handling a Claim for Current-Law Pension
Introduction |
This topic contains information on handling a claim for current-law pension including
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Change Date |
June 25, 2015 |
VI.ii.4.A.4.b. Handling an Election of Current-Law Pension Over Disability Compensation, Section 306 Pension, or Old Law Pension |
If a Veteran who is entitled to MRP elects current-law pension over disability compensation, Section 306 Pension, or Old Law pension,
Note: Waived MRP counts as income for current-law pension under 38 CFR 3.276(a).
Reference: For more information on contacting an RPC, see M21-1, Part VI, Subpart ii, 4.C.2.f. |
5. Handling Elections or Waivers of MRP in Incompetency Cases
Introduction |
This topic contains information on handling elections or waivers of MRP in incompetency cases, including
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Change Date |
March 4, 2019 |
VI.ii.4.A.5.a. Who May Elect or Waive MRP With a Service Department Finding of Incompetency |
If a service department finds that a Veteran is mentally incompetent, only a trustee or fiduciary recognized by one of the military services may make an election or waiver of MRP.
Do not accept an election or waiver based on a Veteran’s signature on the forms listed in M21-1, Part VI, Subpart ii, 4.A.2.e when a service department holds the Veteran to be incompetent.
If required under State law, a court must authorize the fiduciary or trustee to make an election or waiver before such election or waiver is processed. |
VI.ii.4.A.5.b. Service Department Incompetency Determinations and the Designation of a Trustee |
Per 37 U.S.C. 602, a board of medical officers or physicians is required to
If the board finds the member is incompetent, the Secretary of the Veteran’s service department designates a trustee to receive the Veteran’s MRP. |
VI.ii.4.A.5.c. Handling a Service Department’s Finding of a Veteran’s Incompetency |
Follow the steps in the table below to handle a service department’s finding of a Veteran’s incompetency.
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VI.ii.4.A.5.e. Handling an Election or Waiver From a Spouse-Payee |
Upon receipt of an election or waiver of MRP from a spouse-payee who was appointed trustee by the military, prepare and furnish VA Form 21-592 to the fiduciary hub to either
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VI.ii.4.A.5.f. Handling an Election or Waiver From an Institutional Payee |
Use the table below to determine the election or waiver requirements when a service department appoints an institution as a Veteran’s trustee.
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VI.ii.4.A.5.g. Advising a Fiduciary of a Reduction of VA Benefits and the Right to Reelect MRP |
When VA awards benefits as a result of a total waiver of MRP then VA subsequently reduces or terminates benefits due to improvement in the Veteran’s condition, advise the Veteran’s fiduciary of the right to reelect MRP.
Note: A reelection is not required if MRP exceeds the amount of VA benefits payable and there is a partial waiver in place. Under these circumstances, the Veteran’s service department automatically adjusts the benefits. |
VI.ii.4.A.5.h. What Service Departments Require Before They Will Accept an Election or Waiver Based on Restored Competency |
As with a finding of incompetency, service departments will recognize a finding that a Veteran’s competency has been restored only if it is provided by a board of medical officers or physicians.
A VA rating of restored competency and the examination report on which it was based must
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VI.ii.4.A.5.i. Withholding Disability Compensation in Incompetency Cases |
If VA receives a waiver of MRP in an incompetency or proposed incompetency case, withhold disability compensation according to the instructions in M21-1, Part VI, Subpart ii, 4.B, without regard to where the Veteran’s case is in the process.
Important: Enter withholdings for MRP on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in VBMS Awards. Never enter withholdings for MRP on the OTHER ADJUSTMENTS tab of the AWARD ADJUSTMENTS screen. |
6. CRDP
Introduction |
This topic contains information on the concurrent payment of MRP and disability compensation, including
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Change Date |
September 19, 2019 |
VI.ii.4.A.6.a. History of SCSD |
The Defense Authorization Act of 2000 established the benefit known as Special Compensation for Severely Disabled Retirees (SCSD), effective October 1, 1999.
The eligibility criteria for this benefit were liberalized effective October 1, 2001, and February 1, 2002. The benefit was then repealed effective January 1, 2004, and replaced with CRDP.
DoD was responsible for administering the SCSD program and paying SCSD. The amount of payment was based on the percent of the VA disability rating, and the payment was taxable.
The basic criteria for eligibility are shown in the table below.
Note: Although CRDP replaced SCSD, this brief history is provided for general information in case reference to SCSD is encountered during routine review of a Veteran’s records.
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VI.ii.4.A.6.b. Overview of CRDP |
The National Defense Authorization Act of 2004 established CRDP, effective January 1, 2004. DoD is responsible for administering this program, the intended purpose of which was to phase out the offset of MRP for VA disability compensation over a 10-year period.
Veterans may qualify for CRDP if they
Notes:
References: For more information on
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VI.ii.4.A.6.c. Application for or Election of CRDP |
An application for CRDP is not necessary.
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VI.ii.4.A.6.d. Effect of CRDP on Waived Amounts of MRP |
CRDP restores some or all of that portion of MRP a Veteran waived in order to receive VA disability compensation.
CRDP is subject to all of the same laws and regulations that apply to MRP, including reductions for
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VI.ii.4.A.6.e. CRDP Rate Table |
The table below shows the amount of CRDP that DoD credited Veterans against the MRP they had waived.
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VI.ii.4.A.6.f. Timetable for Eliminating the Offset of MRP |
Elimination of the offset of MRP for disability compensation was phased in over a period of 10 years.
The table below shows the percentage of the offset that DoD restored through CRDP over the 10-year phase-in period.
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VI.ii.4.A.6.g. Example of How DFAS Calculated CRDP Prior to 2014 |
Below is an example of how DFAS calculated CRDP prior to 2014.
Situation:
Calculations: Using the rate table in M21-1, Part VI, Subpart ii, 4.A.6.e, the waived amount of $1,557.00 was reduced by $500.00, leaving a balance of $1,057.00.
The balance of $1,057.00 was multiplied by .28 (28 percent, according to the table in M21-1, Part VI, Subpart ii, 4.A.6.f) resulting in $295.96. This amount was added to the $500.00 from the rate table in M21-1, Part VI, Subpart ii, 4.A.6.e, for a 90-percent disabled Veteran ($295.96 plus $500.00 equals $795.96).
Result: The gross CRDP rate payable in 2006 was $795.96. The rate was recalculated each year, until the full amount of the offset was eliminated in 2014. |
VI.ii.4.A.6.h. Changes That Affected Veterans With a Total Disability Rating |
Effective January 1, 2005, the CRDP phase-in timetable referenced in M21-1, Part VI, Subpart ii, 4.A.6.f no longer applied to Veterans
Accordingly, if such Veterans retired due to years of service and were entitled to CRDP, they could receive the full amount of MRP and VA disability compensation from the later of the following dates:
If a Veteran retired due to disability under 10 U.S.C. Chapter 61, CRDP is subject to an offset for the difference between
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7. Concurrent Payment of VA Benefits and CRSC
Introduction |
This topic contains information about concurrent payment of VA benefits and CRSC, including
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Change Date |
July 29, 2024 |
VI.ii.4.A.7.a. Overview of CRSC |
CRSC was authorized by the National Defense Authorization Act of 2003, Public Law (PL) 107-314, and became effective June 1, 2003. This benefit was designed to compensate certain Veterans who must waive MRP in order to receive VA disability compensation.
CRSC is a monthly benefit DoD pays to eligible military retirees that is separate from MRP. It is not classified as MRP, and it is not taxable. It is, however, subject to garnishment for child support and alimony. |
VI.ii.4.A.7.b. CRSC Eligibility Criteria |
The eligibility criteria for CRSC
Note: Eligibility is determined by the Veteran’s service department. VA may need to furnish disability information to a service department, but CRSC is administered and paid by DoD, not VA.
Reference: For more information on CRSC, see the Under Secretary of Defense, Personnel, and Readiness: Military Compensation internet site. |
VI.ii.4.A.7.c. Definition: Qualifying Combat-Related Disability |
To be eligible for CRSC, a Veteran must have an SC disability that is combat-related. A qualifying combat-related disability, for the purpose of this benefit, is defined in the following table.
Important: Military service departments – not VA – are responsible for making the final determination regarding qualifying disabilities.
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VI.ii.4.A.7.d. Notifying a Veteran With Agent Orange-Related Disabilities of Possible Entitlement to CRSC |
Include the following paragraph in a decision notice when
You may be entitled to Combat-Related Special Compensation (CRSC) for your service-connected [new Agent Orange disability(ies)]. CRSC provides monthly payments to eligible retired Veterans with combat-related disability(ies), and is a benefit administered by the Department of Defense. Entitlement to CRSC is not automatic. Accordingly, to receive CRSC for your service-connected [new Agent Orange disability(ies)], you must specifically apply for CRSC for that disability, even if you have already been awarded CRSC for disabilities previously service-connected by VA. |
VI.ii.4.A.7.e. Application for CRSC |
To apply for CRSC, Veterans must contact their service department. The service department will ask the Veteran to
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VI.ii.4.A.7.f. Amount Payable Under CRSC |
Generally, the amount payable under CRSC is equal to the amount of compensation VA would pay for the combat-related disability(ies). However, there are circumstances that affect the amount of CRSC that DoD will pay.
DoD bases CRSC payments on VA’s disability compensation rates, and payment is supported by legislation found in 38 U.S.C. Chapter 11
The actual amount to be paid is determined by DoD, and it is influenced by certain variables. The following table gives a synopsis of issues that may affect the rate of CRSC that is payable.
Note: The amount of CRSC entitlement plus any MRP not offset under 38 U.S.C. 5304 and 38 U.S.C. 5305 cannot be greater than the full MRP to which the Veteran is entitled. |
VI.ii.4.A.7.g. RO Liaison With CRSC Boards |
CRSC boards are responsible for determining eligibility for CRSC. In order to make a determination, these boards occasionally require
Each RO is responsible for designating an employee (the RO’s Military Records Specialist (MRS)) to serve as a liaison with CRSC boards. MRSs are responsible for responding to requests from CRSC boards. |
VI.ii.4.A.7.h. Controlling CRSC Board Requests and Taking Work Credit for Responding |
MRSs use end product (EP) 502 to control requests from CRSC boards and clear the EP for work credit after responding to a request. |
VI.ii.4.A.7.i. CRSC Board Requests for Records in VA’s Possession |
CRSC boards may request copies of the following from VA:
CRSC boards e-mail their requests to the mailbox (VAVBAWAS/CO/MILPAY) of Compensation Service’s Military Pay (MILPAY) Staff. This staff then routes the request to the appropriate MRS. Upon receipt of such a request, the MRS
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VI.ii.4.A.7.j. Definition: Discrepant Data |
Discrepant data is any data that contradicts information
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VI.ii.4.A.7.k. Responsibilities of ROs and Compensation Service’s MILPAY Staff With Regard to Handling CRSC Board Requests for Clarification of Discrepant Data |
The table below describes the responsibilities of ROs and the MILPAY Staff with regard to handling requests from a CRSC board for clarification of discrepant data.
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VI.ii.4.A.7.l. Process for Taking Corrective Action to Resolve Discrepant Data |
The table below describes the process ROs must follow upon receipt of notice from the MILPAY Staff (through OFO) that corrective action is required to resolve discrepant data identified by a CRSC board.
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VI.ii.4.A.7.m. Flagging Cases That Require Corrective Action to Resolve Discrepant Data |
When corrective action is necessary to resolve discrepant data, and the Veteran who is the subject of the CRSC board request for clarification has a paper claims folder, the MRS overseeing the corrective action must attach the folder flash shown below to the front of the claims folder.
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