; and (B) is also entitled for that month to veterans’ disability compensation. . (2) Disability retirees Paragraph (2) of subsection (b) of section 1414 of such title is amended to read as follows: (2) Special rule for retirees with fewer than 20 years of service The retired pay of a qualified retiree who is retired under chapter 61 of this title with fewer than 20 years of creditable service is subject to reduction by the lesser of— (A) the amount of the reduction under sections 5304 and 5305 of title 38; or (B) the amount (if any) by which the amount of the member’s retired pay under such chapter exceeds the amount equal to 2½ percent of the member’s years of creditable service multiplied by the member’s retired pay base under section 1406(b)(1) or 1407 of this title, whichever is applicable to the member. . (b) Effective date The amendments made by this section shall take effect on January 1, 2018, and shall apply to payments for months beginning on or after that date.