CRDP and CRSC (retirees)

By default, military retirement pay is OFFSET dollar-for-dollar by VA disability compensation. This is the “VA waiver” — you give up retirement pay equal to your disability pay so the disability portion is tax-free. Two programs let you receive both without offset, in part or in full.

CRDP — Concurrent Retirement and Disability Pay

• For retirees with 20+ years of qualifying service
• Rated 50% or higher VA disability
• Restores the offset progressively as VA rating increases (full restoration at 100%)
• Automatic — no application required if you qualify

CRSC — Combat-Related Special Compensation

• For retirees with combat-related disabilities (only those tied to combat, instrumentality of war, simulated war, or hazardous duty)
• No 20-year service requirement — Chapter 61 medical retirees can qualify
• Pays tax-free in addition to retirement pay (no offset)
• Must be applied for through your service branch

Strategy

If you’re retired and have combat-related disabilities, apply for CRSC even if you have CRDP. You can receive whichever pays more, and the calculation depends on your specific rating profile. Most retirees don’t know to apply for both and assess monthly which provides higher payment.

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