CRDP vs CRSC, Concurrent Receipt for Military Retirees with VA Disability

Every November, DFAS mails military retirees a letter that quietly decides real money: the CRDP versus CRSC election. The choice sticks for a full year, it does not auto-pick the higher amount, and the right answer turns on two things: how much of the disability is combat related, and what a tax free dollar is worth at your bracket.

The concurrent receipt problem explained

A military retiree who is also rated by VA for a service connected disability runs into a problem that most veterans never have to think about. Military retired pay and VA disability compensation are two separate checks from two separate agencies. Until 2004, the retiree had to give up one dollar of retired pay for every dollar of VA disability compensation collected. This was called the "VA waiver" and it cost military retirees billions of dollars over the years.

Congress fixed this in two ways. Both are concurrent-receipt programs. Both restore at least some of the offset retired pay. Both come with their own rules and their own math. A retiree who qualifies for both is required to elect one each year and can change the election once a year during open season.

Picking the wrong one costs money.

This is educational. It is not legal or financial advice. For your specific situation, work with DFAS Retired and Annuitant Pay or with a VA accredited representative.

The math problem CRDP and CRSC solve

A military retiree with 20 or more years of service receives retired pay from DFAS. A veteran with a service connected condition receives VA disability compensation from VA. By law before 2004, the retired pay was reduced dollar-for-dollar by the VA compensation, then the retiree received the VA compensation separately. The net was the same total, but the VA portion was tax free and the retired pay portion was taxable. The "waiver" of taxable retired pay in favor of tax free VA compensation was the only good thing about the system.

Congress wanted retirees with significant service connected conditions to be able to keep both checks, in full, from both agencies. Congress did this in two stages.

Program 1, CRDP (Concurrent Retirement and Disability Pay)

CRDP is the broader of the two programs. It restores retired pay that was waived because of VA disability compensation, for retirees who are at least 50 percent VA-rated and who retired with 20 or more years of service (regular retirement) or under disability retirement that converted to length-of-service retirement.

Source rules:

• 10 USC 1414
• DoD Financial Management Regulation, Volume 7B, Chapter 64

Key facts about CRDP:

• Eligibility: VA combined rating of 50 percent or higher. Regular retirement with 20 or more years of service, or a length-of-service-equivalent disability retirement.
• What it restores: The amount of retired pay previously waived because of VA compensation, up to 100 percent of the retired pay.
• Phase-in: Originally phased in from 2004 to 2014. Now fully phased in.
• Taxability: Restored retired pay is taxable. (VA compensation remains tax free.)
• Auto-applied: DFAS automatically applies CRDP to qualifying retirees, no separate application required.

Where CRDP falls short: Retirees who are below 50 percent VA-rated do not qualify. Retirees whose disability was not combat related but whose retired pay was waived in full because of total disability do not qualify if they do not meet the 50 percent VA threshold.

Program 2, CRSC (Combat Related Special Compensation)

CRSC is the narrower of the two programs but pays separately on top of any restored retired pay. CRSC compensates retirees specifically for service connected disabilities that are combat related.

Source rules:

• 10 USC 1413a
• DoD Financial Management Regulation, Volume 7B, Chapter 63

Key facts about CRSC:

• Eligibility: Any percentage of VA disability where the disability is rated as combat related. Regular retirement (20+ years), or length-of-service-equivalent disability retirement.
• What "combat related" means: The disability resulted from armed conflict, hazardous duty, an instrumentality of war, or simulated combat training. CRSC has a specific definition that the service branches apply when adjudicating CRSC claims.
• What it pays: Tax free monthly compensation equal to (or up to the level of) the VA disability rate for the combat related portion of the disability. Importantly, CRSC is not capped at the retired pay amount.
• Application required: Retirees apply to their service branch (Army, Navy/Marines, Air Force/Space Force, Coast Guard), not to DFAS. The service branch decides which conditions are combat related and approves a CRSC rate.
• Taxability: CRSC is tax free.

Where CRSC falls short: Disabilities that are service connected but not combat related are not covered. The retiree's service branch makes the combat related determination, which can produce a CRSC rate lower than the VA combined rating.

Choosing between CRDP and CRSC

A retiree who qualifies for both programs picks one each year. DFAS sends an open-season letter every November and December. The retiree's election applies to all of the following year.

The math comparison is simple in concept and trickier in practice:

• CRDP restores up to the full amount of waived retired pay. The restored amount is taxable.
• CRSC pays the tax free VA-rate amount, but only for the portion of disability that the service branch confirms is combat related.

A useful rule of thumb:

• If most or all of the VA-rated disability is combat related and the retiree's marginal tax rate is meaningful, CRSC is often the better election because the tax free dollar is worth more than the taxable dollar.
• If little or none of the VA-rated disability is combat related but the retiree is 50 percent or higher VA-rated, CRDP is often the better election because there may be no CRSC amount to receive.
• If both programs would pay roughly the same amount, the tax free nature of CRSC usually wins by enough to make CRSC the better election.

DFAS publishes a comparison calculator each year that runs the math for the retiree's specific numbers. The calculator is the single best tool for the comparison.

What concurrent receipt does not allow

• A retiree cannot receive both CRDP and CRSC at the same time. Election of one waives the other for the duration of the election year.
• VA disability compensation is paid in full whether or not CRDP or CRSC is elected. The election is between two ways of being made whole on the retired pay side.
• CRSC is not retroactive without an effective application. A retiree who was eligible for CRSC for years but never applied receives CRSC from the date the service branch grants the application, not from the date of original eligibility.

Who is not covered

• Retirees who retired with less than 20 years of service and who did not get a disability retirement that converts to a length-of-service-equivalent are generally not eligible for either CRDP or CRSC. The Concurrent Receipt Coalition has lobbied for years to expand the programs to Chapter 61 retirees with less than 20 years of service. This is referenced in Congress as the "Major Richard Star Act". As of 2025, the change is not yet law.
• Reservists who did not retire under a length-of-service retirement formula may not qualify.

How to apply

• CRDP: No application. DFAS applies CRDP automatically when the retiree's VA combined rating reaches 50 percent. If you are 50 percent or higher and your retired pay still shows a VA waiver, contact DFAS Retired and Annuitant Pay.
• CRSC: Application required to the appropriate service branch:

- Army HRC, Army Review Boards Agency, CRSC Branch - Navy Personnel Command, CRSC Branch (also handles Marine Corps) - Air Force Personnel Center, CRSC Branch (also handles Space Force) - Coast Guard Personnel Service Center, CRSC Branch

DFAS Retired and Annuitant Pay is the central point of contact for questions about either program.

Common mistakes

• Retirees assume CRDP automatically picks the higher amount each year. It does not. The retiree's election is sticky until the open season.
• Retirees apply for CRSC and assume CRDP stops automatically when CRSC is approved. The retiree has to make the election with DFAS at the open season.
• Retirees who were retired before 2004 sometimes do not know the program exists. CRDP has been paying since 2004 and CRSC since 2003. Both are available to currently retired veterans who qualify, even if the retirement happened decades earlier.

Sources

• 10 USC 1414 (CRDP statute)
• 10 USC 1413a (CRSC statute)
• DoD Financial Management Regulation, Volume 7B, Chapter 63 (CRSC)
• DoD Financial Management Regulation, Volume 7B, Chapter 64 (CRDP)
• DFAS Retired and Annuitant Pay, Disability Comparison page
• DFAS, CRSC Application Process page
• VA M21-1, Part III, Subpart v, Chapter 4 (concurrent receipt coordination)

Related resources

• The CRSC and CRDP calculator: run both programs against your numbers.
• Combined rating calculator: the VA rating that drives the concurrent receipt math.

Related on this site

• VA Math: How Combined Ratings Really Work