CRDP and CRSC Support Retired Disabled Veterans

During military retirement, veterans with disabilities can face financial challenges. As of August 2022, more than a quarter of veterans had a service-connected disability. 

Older Americans on fixed incomes, including retired military personnel, are among those most affected by rising inflation. 

Managing disabilities can further increase one’s cost of living. In one survey, 82 percent of disabled veterans cited the increased costs of goods as a top source of financial strain.

Through Concurrent Retirement and Disability Pay (CRDP) and Combat-Related Special Compensation (CRSC), retired military personnel can receive compensation for disabilities or combat injuries. CRDP pay generally covers conditions caused or aggravated by military service, while CRSC pay is only for combat-related disabilities.

Military Retirement

Retirement and disability compensation are sources of financial support for retired veterans.

• The Department of Defense provides retirement payments to veterans based on years of service and rank.
• Veterans with disabilities also receive Department of Veterans Affairs (VA) disability compensation pay, which reflects the severity of their disabilities.

The Veterans Affairs Waiver

Military retirees with disabilities may qualify for retirement payments as well as VA disability benefits. However, if they do, they must subtract from their gross retirement pay the amount of their VA disability. This so-called VA offset, or VA waiver, reduces the total benefits they can receive.

Legislators have worked to counter the waiver, to help improve financial support in military retirement for veterans with disabilities. The Concurrent Retirement and Disability Pay (CRDP) and Combat-Related Special Compensation (CRSC) work to counteract the VA offset. These programs offer additional pay for retired military personnel with disabilities. Via CRDP or CRSC, these retirees may recover some, or all, of the retired pay they had to waive to get VA disability benefits.

Concurrent Retirement and Disability Pay

Monthly Concurrent Retirement and Disability Pay (CRDP) restores full retirement pay for military retirees receiving VA disability benefits for a service-connected disability.

To qualify for CRDP, a military retiree must:

• have completed at least 20 years of service,
• be eligible for military retired pay and VA Disability Compensation, and
• have a service-connected disability with at least a 50 percent rating.

(The Secretary of Veterans Affairs measures the severity of service-connected disabilities using the VA schedule for rating disabilities. Retired service members need at least a 50 percent VA disability.)

For these veterans, CRDP completely counteracts the VA waiver.

Most people do not have to apply for CRDP. The VA provides the Defense Finance and Accounting Service (DFAS) with disability compensation information. The DFAS will process and pay your CRDP on a regular monthly schedule. Reserve and Guard members may need to contact their Branch of Service.

Combat-Related Special Compensation

Combat-Related Special Compensation (CRSC) provides retired veterans who have sustained combat-related disabilities with tax-free financial support. CRSC supplements the retirement pay of military personnel who have retired and also have service-connected disabilities.

Combat pay is available to disabled veterans who have retired and qualify for, or are receiving, military retirement pay. (Their VA disability rating must be at least 10 percent.) They also must be receiving reduced retirement payments because of VA disability payments. In addition, these veterans have to meet one of the following criteria:

• They have 20 or more years of military, National Guard, or Reserve service;
• They retired under the Temporary Early Retirement Act (TERA);
• They are on the Temporary Disability Retired List (TDRL); or
• They are on the Permanent Disability Retired List (PDRL).

Under a special rule, veterans who have not yet served for 20 years may qualify for CRSC benefits, too. They must have had to retire because a combat-related condition would not allow them to continue their service. The military also must rate their disability 30 percent or higher. These veterans are so-called “Chapter 61” retirees.

Note that Chapter 61 retirees cannot, however, receive more than what they would have gotten without a disability. That is, they can receive VA disability and military retired pay at the same time. Yet they eventually face a cap on these concurrent payments. The cap takes effect once they are receiving the amount they would have gotten had they retired for years of service.

Retired veterans can obtain CRSC by applying through their uniformed service. Applying for benefits involves demonstrating a combat-related disability. Involvement in least one of the following is necessary to show a combat-related disability:

• Armed conflict
• Hazardous duty
• War simulation activities
• Instruments of war
• Activity that led to a Purple Heart

Additional Resources

If you or a loved one are exploring CRDP or CRSC payments, the following resources could help:

• Contact DFAS at 800-321-1080 for questions about military retired pay.
• For questions about disability ratings or disability compensation, contact the VA at 800-827-1000.
• The Department of Veterans Affairs provides instructions for how to apply for CRSC.

Consider reaching out to a local, licensed special needs planning attorney. You can also search for a VA-accredited attorney on the VA website. A qualified attorney can assist you with understanding which program you should pursue as well as accessing benefits.

You may also benefit from checking out the following articles:

• Lesser-Known Resources for Disabled American Veterans
• Reasons Veterans Miss Out on Disability Benefits
• 2023 Supreme Court Ruling Affects Retroactive Veteran Benefits