KEY TAKEAWAYS
- Two programs exist to restore military retired pay offset by VA disability compensation: CRDP (automatic, taxable, requires 50%+ rating) and CRSC (application required, tax-free, requires only 10%+ rating but must be combat-related).
- You cannot receive both simultaneously — you must elect one during the annual open season, typically in January. DFAS enrolls you in whichever is more beneficial at first eligibility.
- CRSC’s tax-free status is its biggest advantage — in the 22% bracket, $1,000 in CRSC equals roughly $1,280 in taxable CRDP. Always calculate after-tax amounts before electing.
- Chapter 61 disability retirees with fewer than 20 years are not eligible for CRDP — but can receive CRSC, subject to a longevity cap.
- Over 890,000 military retirees currently receive CRSC or CRDP payments totaling approximately $21 billion annually. If you’re not enrolled, you may be leaving significant money on the table.
- Understanding the VA Disability Offset
- What Is CRDP?
- What Is CRSC?
- CRSC vs CRDP: Side-by-Side Comparison
- CRDP Eligibility Requirements
- CRSC Eligibility Requirements
- How to Apply for CRSC
- Which Pays More: CRSC or CRDP?
- Annual Open Season Election
- Special Rules for Chapter 61 Disability Retirees
- Frequently Asked Questions
Before 2004, military retirees faced a frustrating reality: VA disability compensation reduced their military retired pay dollar-for-dollar. Congress recognized this as unfair and created two programs to restore that lost income — Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP). More than 890,000 retirees now receive one or the other, totaling approximately $21 billion annually. If you’re a military retiree with VA-rated disabilities and you’re not enrolled in one of these programs, you may be leaving significant money unclaimed.
Understanding the VA Disability Offset
The VA offset works like this: when a military retiree receives VA disability compensation, their DoD retired pay is reduced by the same amount — dollar for dollar. A retiree earning $2,500/month in retired pay who qualifies for $1,800/month in VA disability compensation would see their retired pay reduced to $700. Total income stays at $2,500 — they’re not losing money outright, but they receive no additional compensation for their service-connected disabilities on top of what they already earned through retirement.
CRSC and CRDP were created to address this. Both programs restore some or all of the retired pay that was offset — effectively allowing qualifying retirees to receive both their full retired pay and their full VA disability compensation concurrently. Use our VA disability compensation calculator to see your current monthly compensation amount, and our military pension calculator to model the retired pay side of the equation.
What Is CRDP (Concurrent Retirement and Disability Pay)?
Concurrent Retirement and Disability Pay (CRDP) restores military retired pay that was reduced by the VA offset. It requires a combined VA rating of 50% or higher, and no application is needed — DFAS automatically enrolls eligible retirees when the VA notifies them of your rating.
Key characteristics of CRDP:
- Restores retired pay offset by VA disability compensation — not a separate payment, but a restoration of what was reduced
- Requires a combined VA disability rating of 50% or higher
- No application required — DFAS automatically enrolls eligible retirees
- Taxable income — treated the same as regular retired pay
- Paid by DFAS as part of your retired pay statement
- Phase-in completed in 2014 — eligible retirees now receive full restoration
- Subject to division in divorce proceedings as part of retired pay
More than 310,000 retirees currently receive CRDP totaling over $427 million per month. If you have a 50%+ VA rating, have 20 or more years of service, and are receiving retired pay, DFAS should already be paying CRDP automatically. If you believe you’re eligible but aren’t seeing it on your Retiree Account Statement, contact DFAS at 800-321-1080.
What Is CRSC (Combat-Related Special Compensation)?
Combat-Related Special Compensation (CRSC) is a tax-free monthly payment for military retirees whose disabilities are directly related to combat. The VA rating threshold is lower than CRDP — just 10% — but the disabilities must qualify as combat-related under specific criteria.
Key characteristics of CRSC:
- Tax-free compensation — not subject to federal income tax
- Requires only a 10% or higher VA disability rating
- Disabilities must qualify as combat-related — not simply service-connected
- Application required — submit DD Form 2860 through your branch of service
- Paid separately from retired pay by DFAS
- Not subject to division in divorce proceedings — not considered retired pay
- Available to Chapter 61 disability retirees regardless of years of service (with a longevity cap)
The combat-related requirement is the critical distinction. Your disability must have been incurred as a direct result of armed conflict, while engaged in hazardous service, in conditions simulating war, through an instrumentality of war, or from activities that resulted in a Purple Heart award. More than 75,000 retirees receive CRSC totaling over $71 million per month.
CRSC vs CRDP: Side-by-Side Comparison
| Feature | CRDP | CRSC |
|---|---|---|
| Minimum VA Rating | 50% | 10% |
| Combat-Related Required? | No | Yes |
| Application Required? | No (automatic) | Yes (DD Form 2860) |
| Taxable? | Yes | No (tax-free) |
| Subject to Divorce Division? | Yes | No |
| Chapter 61 Retirees (<20 years) | Not eligible | Eligible (with limits) |
| Maximum Amount | Full VA offset restoration | Combat-related portion only (capped at VA offset) |
| Payment Source | DFAS (with retired pay) | DFAS (separate payment) |
| Survivors Eligible? | No | No |
CRDP Eligibility Requirements
To qualify for CRDP, you must meet all of the following:
- Military retirement: Regular retiree with 20+ years of service, reserve retiree with 20+ qualifying years who has reached retirement age, or Chapter 61 disability retiree with 20+ years of service
- VA rating: Combined service-connected disability rating of 50% or higher
- Currently receiving retired pay that is subject to the VA offset
Chapter 61 disability retirees with fewer than 20 years of service are not eligible for CRDP — this is a significant gap that affects many combat-wounded veterans who were medically retired early. CRSC remains available to this group (see the Chapter 61 section below).
If you meet CRDP requirements, DFAS will pay it automatically. You’ll see it on your Retiree Account Statement (RAS) through myPay. No action required on your part.
CRSC Eligibility Requirements
CRSC has a broader service eligibility in some ways — it covers Chapter 61 retirees with any years of service — but adds the combat-related requirement that CRDP does not have. You must meet all of the following:
- Military retirement: Retired with 20+ years of active service; retired from reserves/National Guard with 20+ qualifying years and reached age 60; or medically retired under Chapter 61 (any years of service)
- VA rating: Service-connected disability rating of at least 10%
- VA offset active: Your DoD retired pay is currently reduced by the VA disability offset
- Combat-related disability: At least one of your rated disabilities must qualify as combat-related under one of the categories below
Combat-Related Disability Categories
- Purple Heart (PH): The disability resulted from an injury for which you received the Purple Heart. This is the most straightforward pathway — if you have the Purple Heart and a VA rating for that injury, it qualifies automatically.
- Direct Result of Armed Conflict (AC): Injuries from enemy fire, IEDs, combat operations, or hostile action. Must have occurred while engaging the enemy or in a combat theater.
- Hazardous Service (HS): Parachute duty, flight deck duty, demolition duty, diving duty, exposure to hazardous materials in a duty capacity, experimental stress duty.
- Conditions Simulating War (SW): Training exercises designed to replicate combat — war games, field training exercises, MOUT training, combat training that resulted in injury.
- Instrumentality of War (IW): Injury caused by a military weapon, vehicle, aircraft, or vessel — including military vehicle accidents, injuries from weapons or explosives, injuries from military aircraft.
How to Apply for CRSC
Unlike CRDP, CRSC requires you to apply. Here’s the step-by-step process:
- Verify eligibility. Confirm you meet all requirements and that at least one of your VA-rated disabilities qualifies as combat-related under the categories above.
- Gather documentation. You’ll need: all DD-214s and DD-215s; complete VA rating decisions including code sheets; medical records from when the injury occurred; service records proving combat-related cause (After Action Reports, award citations, personnel records); Purple Heart citation if applicable; Physical Evaluation Board results if applicable. Copies only — originals are not returned.
- Complete DD Form 2860. Download and complete the DD Form 2860 (Claim for Combat-Related Special Compensation). Fill in every section — write “Don’t Know” or “DK” rather than leaving blanks. Section III requires a written explanation of how each disability was incurred in combat-related circumstances.
- Submit to your branch of service. Send your completed form and supporting documentation (copies only) to the appropriate address below.
- Wait for determination. Processing typically takes 3–6 months. You’ll receive a determination letter explaining which disabilities (if any) were approved as combat-related.
- Receive payment. If approved, DFAS begins CRSC payments within 30–45 days of receiving approval from your branch. Retroactive back pay to your effective date may also be issued. Note: there is a 6-year statute of limitations on back pay — file within 6 years of your VA rating decision or the date you became entitled to retired pay to receive full back payments.
CRSC Branch Contact Information
| Branch | Mailing Address | Contact |
|---|---|---|
| Army | U.S. Army Human Resources Command ATTN: AHRC-PDP-C (CRSC), Dept 480 1600 Spearhead Division Avenue Fort Knox, KY 40122-5408 | usarmy.knox.hrc.mbx.tagd-crsc-claims@army.mil |
| Navy / Marine Corps | Secretary of the Navy Council of Review Boards Combat-Related Special Compensation Board 720 Kennon Street SE, Suite 309 Washington Navy Yard, DC 20374-5023 | CRSC@navy.mil | 877-366-2772 |
| Air Force / Space Force | HQ AFPC/DPPDC (CRSC) 550 C Street West, Suite 6 Randolph AFB, TX 78150-4708 | 866-229-7074 |
| Coast Guard | Commanding Officer (PSD-MR) U.S. Coast Guard Personnel Service Center 2703 MLK Jr Ave SE, Stop 7200 Washington, DC 20593-7200 | 866-772-8724 |
RELATED READING
VA Disability Ratings Guide: How Ratings Are Calculated and What They Pay →
Understanding how your combined rating is calculated affects both your CRSC eligibility and your maximum payment amount.
Which Pays More: CRSC or CRDP?
The answer depends on your specific situation — primarily how much of your VA rating is combat-related vs. non-combat, and your effective tax rate. Here are the three most common scenarios:
Scenario 1: All Disabilities Are Combat-Related
If all of your rated disabilities are combat-related — say, a 70% rating for PTSD from Iraq and TBI from an IED blast — CRSC and CRDP restore the same gross dollar amount. But CRSC is tax-free and CRDP is taxable. At the 22% bracket, CRSC takes home roughly $1,280 for every $1,000 in taxable CRDP. CRSC wins clearly.
Scenario 2: Mixed Combat and Non-Combat Disabilities
A retiree with an 80% combined rating — 50% combat-related (Purple Heart injuries), 30% non-combat (sleep apnea, arthritis) — faces a real calculation. CRDP restores the full VA offset (taxable). CRSC restores only the 50% combat-related portion (tax-free). You need to compare the after-tax CRDP amount against the smaller-but-tax-free CRSC amount. Use the 22% bracket gross-up: if taxable CRDP is $1,800/month, the after-tax value is $1,404. If tax-free CRSC is $1,200/month, CRDP still wins in this example — but the math changes at higher tax rates or higher combat-related percentages. Calculate before you elect.
Scenario 3: Low Combat-Related Percentage
A retiree with a 60% combined rating — 10% combat-related, 50% non-combat — will almost certainly do better with CRDP. The tax-free advantage on a small CRSC payment rarely exceeds the larger gross amount from CRDP restoring the full offset. CRDP typically wins.
Two additional factors to weigh:
- State taxes: Many states exempt military retirement income — check your state’s treatment of both CRDP (treated as retired pay) and CRSC (federally tax-free). See our military retirement tax by state guide for a full breakdown.
- Divorce decree: If your retired pay is being divided under a court order, CRSC is not considered retired pay and cannot be divided. This can make CRSC significantly more valuable in a divorce situation regardless of the gross/net comparison.
Use our VA disability compensation calculator and military pension calculator together to model both scenarios with your actual figures before making an election decision.
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RELATED READING
Military Retirement Benefits Guide 2026: Pay, Pension, TRICARE, and TSP →
CRSC and CRDP are one piece of your overall retirement financial picture — understand how they interact with your pension, TSP, and TRICARE benefits.
Annual Open Season Election
If you’re eligible for both CRSC and CRDP, you must choose one — you cannot receive both simultaneously. DFAS conducts an annual open season (typically in January) when you can change your election. When first eligible for both, DFAS automatically enrolls you in whichever program is more beneficial based on their calculation — but that initial enrollment may not remain optimal as your VA rating or tax situation changes.
Consider switching if any of the following have changed since your last election:
- Your VA rating changed — new disabilities added or existing ratings increased
- A new CRSC determination approved additional combat-related disabilities
- Your tax bracket changed significantly
- Your divorce status or court order changed
- Your state of residence changed and state tax treatment differs
Run the numbers every January. Monitor your Retiree Account Statement through myPay at DFAS and contact DFAS at 800-321-1080 if you want to change your election during open season.
Special Rules for Chapter 61 Disability Retirees
Service members medically retired under Chapter 61 of Title 10 with fewer than 20 years of service face a different set of rules:
- CRDP: Not eligible unless they have 20+ years of service. This is a significant gap affecting many combat-wounded veterans who were medically retired early.
- CRSC: Eligible regardless of years of service, but subject to a longevity cap. The combined amount of remaining retired pay after VA offset plus CRSC cannot exceed what the retiree would have received based on years of service alone (2.5% × years of service × base pay).
Example: A soldier medically retired at 12 years with a 70% DoD disability rating and 80% VA rating:
- Disability retired pay: $2,800/month
- Longevity retired pay (what 12 years would have earned): $1,500/month (12 × 2.5% × base pay)
- VA compensation: $2,000/month
- Retired pay after VA offset: $800/month
- Maximum CRSC: $700/month — so that $800 + $700 = $1,500 (the longevity cap)
This prevents Chapter 61 retirees from receiving more through CRSC than they would have earned through longevity retirement. Use our military pension calculator to model your longevity retirement figure if you’re a Chapter 61 retiree evaluating CRSC. For surviving family member benefits, see our Survivor Benefit Plan (SBP) guide — neither CRSC nor CRDP transfers to survivors, but SBP can provide ongoing income protection for your spouse.
Frequently Asked Questions
No. CRDP is automatic. When DFAS receives VA notification of your 50%+ disability rating, they calculate and pay CRDP automatically. If you believe you’re eligible but don’t see CRDP on your Retiree Account Statement, contact DFAS customer service at 800-321-1080. You can review your RAS through myPay.
Processing typically ranges from 3–6 months by branch. Complex cases requiring additional documentation may take longer. Once your branch approves your application, DFAS begins payments within 30–45 days. Remember the 6-year statute of limitations on retroactive back pay — filing sooner preserves your full back pay eligibility.
No. Neither CRSC nor CRDP transfers to survivors — both programs apply only to the living retiree. Your spouse may be eligible for Survivor Benefit Plan (SBP) payments and VA Dependency and Indemnity Compensation (DIC), but not CRSC or CRDP. If you haven’t enrolled in SBP, review your options during your next open enrollment window.
Request reconsideration through your branch — your denial letter will include instructions and a reconsideration request form. Submit any new evidence that more clearly documents the combat-related cause of your disability. Many applications that are initially denied succeed on reconsideration with better documentation. Consider working with an accredited Veterans Service Officer (VSO) through the DAV, VFW, or American Legion at no cost to strengthen your reconsideration package.
PTSD can qualify for CRSC if it resulted from a specific combat-related event — armed conflict, direct combat, or witnessing traumatic events during combat operations. You’ll need to document the specific combat-related stressor. PTSD from non-combat stressors (training accidents, for example) typically does not qualify, though military sexual trauma (MST) may qualify under certain circumstances. The more precisely you can document the combat-related cause of the PTSD, the stronger the claim. See our guide to VA secondary conditions if PTSD is secondary to another combat-related disability.
DFAS automatically recalculates your payment when the VA changes your rating. This may result in retroactive adjustments — additional payments owed to you, or a debt if you were overpaid. Keep records of all rating changes and monitor your Retiree Account Statement through myPay. A rating increase that pushes you from below 50% to 50%+ may open CRDP eligibility for the first time — a meaningful financial change worth tracking.
CRSC is exempt from federal income tax. Most states also exempt CRSC, but state tax treatment varies. See our military retirement tax by state guide for your specific state’s treatment of both CRSC and military retired pay. Consulting a tax professional familiar with military retirement income is advisable before making your election decision. Learn more about taxes in our guide to veteran benefits provided by your state.
No. Federal law prohibits receiving both programs simultaneously — you must elect one that applies to all your disabilities, even if some would only qualify under CRDP and others only under CRSC. This is why the annual open season election is important: you want to elect whichever program provides the better after-tax outcome given your full disability picture.
This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the Department of Defense, DFAS, VA, or any government agency. For official CRSC/CRDP information, visit DFAS.mil or contact your branch’s CRSC office.
