Concurrent Receipt — CRDP vs CRSC

The retired-pay/VA-disability offset — why CRDP and CRSC exist

Under 10 USC § 1414(a) and its predecessors, a retiree could not collect both military retired pay AND VA disability compensation at full rates — VA disability had to be paid by waiving an equal amount of retired pay. The result: a retiree with $3,000/month retired pay and $1,500/month VA disability effectively received $3,000 total ($1,500 of retired pay forfeited).

Congress carved back this "VA waiver" with two parallel programs that restore the lost income — CRSC effective June 1, 2003, and concurrent receipt (CRDP) effective January 1, 2004, fully phased in since January 1, 2014 (DoD FMR Vol 7B Ch 64 ¶4.1–4.2):

• CRDP (Concurrent Retirement and Disability Pay) — 10 U.S.C. § 1414 — restores the waiver for any retiree with 20+ YOS AND 50%+ VA rating. Taxable.
• CRSC (Combat-Related Special Compensation) — 10 U.S.C. § 1413a — separate tax-free payment for combat-related disabilities at any rating ≥ 10%, regardless of YOS.

You can be eligible for one, both, or neither. DFAS holds an annual Open Season election allowing you to switch between CRDP and CRSC if eligible for both. You cannot receive CRDP and CRSC at the same time — you must elect one program, even if only some of your disabilities are combat-related (10 U.S.C. § 1414(d); DoD FMR Vol 7B Ch 64 ¶5.1).

CRDP — the basics

Eligibility (must meet ALL):

• Retired (regular Title 10, 20+ YOS; or Reserve/Guard at age-eligible 12731 pay receipt)
• VA disability rating of 50% or higher
• Receiving VA disability compensation

Amount: Full restoration of the VA waiver, no monthly cap. If you waive $1,500/month of retired pay for VA disability, CRDP restores the full $1,500. You receive your full retired pay and your full VA disability simultaneously.

Tax: CRDP is taxable as ordinary income, reported on Form 1099-R (the same form as retired pay). Federal withholding follows the IRS Form W-4 on file with DFAS; state withholding varies.

Chapter 61 caveat: CRDP requires 20 years of service. Medical retirees under Title 10 §§ 1201/1202 with fewer than 20 years are not eligible for CRDP at all — though CRSC remains available to them. Chapter 61 retirees with 20 or more years can receive CRDP, but only in part: under 10 U.S.C. § 1414(b)(1) they must still waive Chapter 61 retired pay to the extent it exceeds their hypothetical longevity retired pay — the amount they would have drawn on a length-of-service retirement. The FMR's worked example: $1,000/month of disability retired pay against $800/month of hypothetical longevity pay leaves $800 payable concurrently and $200 permanently waived (DoD FMR Vol 7B Ch 64 ¶2.3.3, Table 64-1). If hypothetical longevity pay equals or exceeds the disability retired pay, nothing stays waived (Table 64-2). DFAS audits each Chapter 61 case individually.

CRSC — the basics

Eligibility (must meet ALL):

• Entitled to and/or receiving military retired pay (any retirement type, including Chapter 61)
• VA disability rating of 10% or higher
• Waive VA pay from retired pay (the standard offset)
• File a CRSC application with your Branch of Service (Army, Navy, Marine Corps, Air Force, Space Force, Coast Guard)
• At least some portion of the VA rating must be combat-related: Armed Conflict, Hazardous Duty, Instrumentality of War, or Simulated War

Amount: The LESSER of (a) the retired pay waived to receive VA compensation, or (b) the amount from the VA rate table corresponding to the combat-related portion of the disability rating. Example: 70% rating total, of which 50% is combat-related → CRSC equals the dollar amount at the "50% combat-related" tier from the VA rate table, capped at the actual VA waiver.

Tax: CRSC is tax-free under 26 U.S.C. § 104. This is the key advantage over CRDP — even if CRDP pays a higher nominal dollar amount, CRSC's tax exemption often wins on after-tax basis.

Chapter 61 cap: A medical retiree's CRSC, combined with any retired pay remaining after the VA offset, cannot exceed the retired pay they would have been entitled to based on length of service alone. For a Chapter 61 retiree with fewer than 20 years of creditable service that ceiling is 2.5% (2.0% under BRS) × creditable years × retired pay base — so a 10-year medical retiree is capped near 25% of high-3, not the 50% a 20-year career would produce. For 20 or more years of creditable service the ceiling is the longevity retired pay the member would otherwise have been entitled to. DFAS performs the cap math at award. Authority: DoD FMR Vol 7B Ch 63 ¶8.5.2.1–8.5.2.2; 10 U.S.C. § 1413a(b)(3).

Retroactive payment: CRSC retroactive pay can go back as far as June 1, 2003 (program start). Disability (Chapter 61) retirees with less than 20 years of service are limited to a retroactive date of January 1, 2008.

CRSC vs CRDP — how to choose

The Open Season election rule means you pick whichever pays more net. General rules of thumb:

• 100% VA rating + most disabilities combat-related: CRSC usually wins because tax-free status applies to a large amount.
• 20+ YOS, high rating, low combat-related portion: CRDP often wins because it pays the full waiver while CRSC is capped at the small combat-related dollar amount.
• Chapter 61 retiree with combat-related disabilities: CRSC usually wins because Chapter 61 CRDP eligibility is limited — and below 20 years of service CRDP is unavailable entirely.
• State tax also matters: Some states tax military retirement (and CRDP) but not CRSC. If you're in a state that fully taxes retirement pay, CRSC's tax advantage grows.

The calculator above gives an after-tax comparison using a 22% federal bracket. Use your actual marginal rate (federal + state) for precision. At a 22% marginal rate each CRDP dollar is worth 78 cents after tax, so CRSC wins whenever the CRSC amount exceeds 78% of the CRDP amount.

How to apply for CRSC

1. Confirm you have a current VA disability rating (file VA Form 21-526EZ if you don't).
2. Gather evidence linking your disabilities to combat: combat awards (Combat Action Badge / Ribbon, Purple Heart, Combat Action Ribbon, etc.), service in a designated combat zone, line-of-duty determinations, hostile-fire pay records, etc.
3. File DD Form 2860, Claim for Combat-Related Special Compensation, with the Military Department you retired from — each branch receives and processes its own retirees’ applications (DoD FMR Vol 7B Ch 63 ¶10.2). Check your branch’s official CRSC page for the current mailing address or submission portal.
4. Your Branch of Service makes the combat-related determination and notifies DFAS of each approved application for payment.
5. DFAS audits the account and initiates payment, including any retroactive lump sum.

Processing time varies by branch, and we do not publish an estimate we cannot source — contact your branch CRSC office for current timelines. Once approved, CRSC is a tax-free entitlement paid monthly by DFAS along with any retired pay you are already receiving.

Reference: VA waiver mechanics

Mechanically, here's how a typical retiree with $3,000 retired pay and 70% VA rating ($1,808/month VA comp for veteran alone) sees it:

• Without CRDP/CRSC: Receives $1,808 from VA, waives $1,808 from retired pay, receives remaining $1,192 retired pay. Total: $3,000.
• With CRDP: Receives full $3,000 retired pay + $1,808 VA = $4,808 total. CRDP value: $1,808/month.
• With CRSC (70% combat-related): Receives $1,192 residual retired pay + $1,808 VA compensation + $1,808 tax-free CRSC = $4,808 total. Same nominal value, but the CRSC portion is tax-free.

The after-tax winner depends on whether the tax-free advantage of CRSC outweighs the larger pre-tax dollars of CRDP (when CRDP and CRSC nominal amounts differ).