CRDP vs. CRSC: Can You Get Military Retired Pay and VA Disability?

Many military retirees can collect both retired pay and VA disability compensation through one of two programs. Concurrent Retirement and Disability Pay (CRDP) covers VA ratings of 50 percent or more, and Combat-Related Special Compensation (CRSC) covers combat-related disabilities rated at least 10 percent.1,2 The CRDP vs. CRSC question has one firm rule: a retiree who qualifies for both receives one or the other, not both at once. Which one applies depends on your VA rating, whether your disabilities are combat-related, and whether you were retired for disability under Chapter 61.

In This Guide

• Why Retired Pay and VA Compensation Offset Each Other
• CRDP vs. CRSC at a Glance
• CRDP: Concurrent Receipt at 50 Percent or More
• CRSC: Who Qualifies for Combat-Related Special Compensation
• How to Apply for CRSC
• If You Were Medically Retired Under Chapter 61
• If You Receive TDIU
• Choosing Between CRDP and CRSC, and Switching at Open Season
• If You Also Qualify for VA Pension
• Frequently Asked Questions
• What to Do Next

Why Retired Pay and VA Compensation Offset Each Other

The starting point is a general rule of law, which the Defense Finance and Accounting Service (DFAS) states plainly: a military retiree "may not receive both" VA disability compensation from the Department of Veterans Affairs and military retired pay at the same time. Instead, the retiree may waive military retired pay, dollar for dollar, to receive VA compensation. That rule sits in 38 U.S.C. 5304 and 5305.1

Concurrent Retirement and Disability Pay (CRDP) and Combat-Related Special Compensation (CRSC) are the two exceptions. Each one pays back some or all of what the waiver takes, under different rules and from different statutes: 10 U.S.C. 1414 for concurrent receipt and 10 U.S.C. 1413a for CRSC.1,2 How VA ratings and compensation work in the first place is covered in our guide to VA disability compensation for older veterans.

CRDP vs. CRSC at a Glance

This table compares the rules, not the dollar amounts. Your own figures depend on your retired pay and your VA rating, so ask DFAS for yours.

CRDP: Concurrent Receipt at 50 Percent or More

Under 10 U.S.C. 1414, a retiree who is entitled to military retired pay and to VA disability compensation for a service-connected disability, or combination of disabilities, rated at least 50 percent disabling is entitled to be paid both, without regard to the 38 U.S.C. 5304 and 5305 offset. The 50 percent is your combined VA rating; the disabilities do not have to be combat-related.1

Concurrent Retirement and Disability Pay (CRDP) is DFAS's name for this exception. DFAS notes that "CRDP is not a term used in the law." The concurrent receipt law, 10 U.S.C. 1414, took effect on January 1, 2004, with a phase-in that ran through December 31, 2013. Since January 1, 2014, eligible retirees other than Chapter 61 disability retirees may receive military retired pay in full alongside VA disability compensation.1

Do you need to apply for CRDP?

Generally, no. Because VA shares information about VA disability compensation with DFAS, DFAS says that "in most circumstances" it can pay concurrent retired pay without a written claim from the retiree. The Army's MyArmyBenefits site says a qualified retiree does not need to apply and will be enrolled automatically.3

DFAS names two situations where you should not just wait:3

• Reserve and Guard members retired under Chapter 61 before eligibility age. DFAS must receive retirement orders directly from your branch of service to start concurrent retired pay at eligibility age, so contact your branch to make sure it is started.
• Anyone who believes they are entitled but is not being paid. Submit a written claim to DFAS on DD Form 827 (Application for Arrears in Pay).

CRSC: Who Qualifies for Combat-Related Special Compensation

Combat-Related Special Compensation (CRSC) is a monthly payment under 10 U.S.C. 1413a to a retiree who is entitled to retired pay, has a combat-related disability, and elects CRSC. DFAS describes it as created "for disability and non-disability military retirees with combat-related disabilities," so it is open to medical retirees as well as length-of-service retirees. The statute excludes retired pay received by reason of 10 U.S.C. 12731b.2

DFAS lists three requirements: you must be entitled to and/or receiving military retired pay, be rated at least 10 percent by VA, and file a CRSC application with your branch of service.2

What counts as combat-related

A combat-related disability is one VA compensates that falls into at least one of these statutory categories. It must be:2

1. Attributable to an injury for which you were awarded the Purple Heart.
2. Incurred as a direct result of armed conflict.
3. Incurred while engaged in hazardous service.
4. Incurred in the performance of duty under conditions simulating war.
5. Incurred through an instrumentality of war.

Both parts of the definition have to be met: VA must compensate the disability, and it must fit one of these categories. Your branch of service reviews your application and decides.4

How much CRSC can pay

The monthly CRSC amount is the VA compensation you would receive counting only your combat-related disabilities. The monthly CRSC payment is capped at the amount by which your retired pay is reduced under 38 U.S.C. 5304 and 5305, so CRSC can replace up to what the offset takes and no more.2

CRSC and federal income tax

CRSC is not subject to federal income tax. IRS Publication 525 says a person receiving combat-related special compensation "may exclude the amount of your combat-related special compensation from your income," while "other portions of your military or disability retirement pay may still be included in your income." DFAS calls CRSC a tax-free entitlement. State tax treatment is a separate question; see our retirement income tax by state guide.5

How to Apply for CRSC

Under 10 U.S.C. 1413a, a retiree applies to the Secretary of a military department, and DFAS's Applying for CRSC page says retirees who receive VA pay and think they are eligible "must apply to their branch of service."4

DFAS says to submit an application in any of these situations: you think you are eligible and have never applied; you have been approved but have more disabilities you think might qualify; or VA has recently added disabilities to your rating that you think might qualify. That last case matters for older retirees, because a disability VA adds to your rating years after retirement may be one that qualifies.4

For Army retirees only: the Army's Human Resources Command CRSC FAQ lists a signed DD Form 2860 among the required documentation and asks for medical records or documentation showing how the injury occurred. If you retired from another branch, ask your branch what documentation it wants.4

If You Were Medically Retired Under Chapter 61

Chapter 61 of title 10 covers retirement for disability, and both programs treat it differently. The rules turn on your years of creditable service at retirement.

CRDP and Chapter 61

Concurrent receipt does not apply to a member retired under Chapter 61 with fewer than 20 years of creditable service. A Chapter 61 retiree with 20 or more years still has retired pay reduced under 38 U.S.C. 5304 and 5305 to the extent it exceeds the retired pay the member would have received if not retired under Chapter 61. In practice, the portion of retired pay that a length-of-service retirement would have paid is protected, and the extra disability portion above it is still offset.1

CRSC and Chapter 61

CRSC is open to Chapter 61 retirees, but 10 U.S.C. 1413a(b)(3) adds a further cap. CRSC combined with the retired pay still payable after the offset may not exceed the retired pay the member would have received under any other provision of law had the member not been retired under Chapter 61. For a Chapter 61 retiree with fewer than 20 years of creditable service, the combined total may not exceed the retired pay percentage under 10 U.S.C. 1409(b) for the member's years of creditable service multiplied by the member's retired pay base.2

That makes CRSC the only one of the two programs available to a Chapter 61 retiree with fewer than 20 years, as long as the retiree has a qualifying combat-related disability and a VA rating of at least 10 percent, and subject to the cap above.1,2

If You Receive TDIU

Under 38 CFR 3.750(c)(2), veterans paid VA compensation based on a determination of individual unemployability (TDIU), and veterans rated 100 percent disabled under the rating schedule, need not file waivers of military retired pay, unless the Chapter 61 excess-retired-pay rule applies.6

The phase-in that ran through 2013 for most retirees was shorter for this group. Under 10 U.S.C. 1414(a)(1), a retiree paid at the 100 percent rate by reason of individual unemployability was subject to the phase-in reduction only from January 1, 2004 through December 31, 2004.6

The general conditions still apply. Under 3.750(b)(1), concurrent receipt requires service-connected disabilities rated 50 percent or more under the rating schedule. A Chapter 61 disability retiree with less than 20 years of creditable service is not eligible, and one with 20 or more years must waive any disability retired pay that exceeds what length-of-service retirement would have paid. Our guide to TDIU for older veterans covers how TDIU itself is awarded and kept.6

Choosing Between CRDP and CRSC, and Switching at Open Season

A retiree who qualifies for both concurrent receipt under 10 U.S.C. 1414 and CRSC under 10 U.S.C. 1413a may receive one or the other, but not both. The statute requires an annual "open season" during which you can switch from one to the other.2

DFAS handles the choice in two stages:2

• The first year. In the initial year of joint eligibility, DFAS automatically applies whichever entitlement is more beneficial to you, based on the gross amount of each.
• Every year after. You make the determination yourself during open season. DFAS says open season usually takes place in January.

Because DFAS's first-year selection compares gross amounts, ask DFAS for both figures before open season if your VA rating, or the disabilities your branch has found combat-related, has changed since the last selection.2

If You Also Qualify for VA Pension

Some older wartime retirees also look at Veterans Pension. VA will not pay pension and compensation at the same time on your own service. Under 38 U.S.C. 5304(a)(1) and 38 CFR 3.700, not more than one award of pension, compensation or retirement pay is made concurrently on a person's own service, except as provided in 10 U.S.C. 1414 or to the extent retirement pay is waived.7

Under 38 CFR 3.701, you may elect whichever VA benefit you want, greater or lesser, and may later elect the other. The election must be in writing and must specify the benefit. An election by a veteran controls the rights of all dependents, and a higher rate under the other benefit is not paid for any date before VA receives the election. That election is made with VA. Our Veterans Pension guide covers who qualifies for pension.7 The CRDP-or-CRSC choice works differently: DFAS makes the first-year selection, and after that you choose during the annual open season.2

What to Do Next

• Start with DFAS for your own numbers. DFAS makes the first-year selection; after that you choose during the annual open season, which DFAS says usually takes place in January.2 Its CRDP and CRSC comparison page is the starting point for questions about your own account.
• Apply to your branch if any disability may be combat-related. Use DD Form 2860 for a first application, or ask your branch for a reconsideration application if VA has added disabilities since you last applied.4
• If you are near 50 percent, look at your rating. Concurrent receipt starts at a 50 percent combined rating, so a rating increase can change which program applies. Our guide to a VA disability increase explains the process.1
• Get help if the paperwork is stuck. A VA-accredited representative can help with VA claims; VA's accredited representative page explains how to find one.

Learn More

Find personalized help working out whether CRDP or CRSC applies to you, and what to ask DFAS or your branch, at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.