CRDP vs CRSC: military retired pay and VA compensation together

The waiver both programs work around

Under 38 U.S.C. 5304 and 5305, a retiree who receives VA disability compensation waives military retired pay dollar for dollar, as DFAS explains on its concurrent-pay page. VA compensation is tax-free, while retired pay is generally taxable. Either way, the waiver can wipe out most or all of the retired check.

DFAS’s own round-number example shows what concurrent receipt changes. A member retires after 20 years of active service with $800 a month in gross retired pay and has a 50% VA rating paying $1,200 a month:

The $1,200 is DFAS’s illustration, not a current VA rate. For the actual VA amount at your rating, use the VA disability pay calculator.

CRDP: retired pay restored at 50% or more

The law. 10 U.S.C. 1414 lets a qualified retiree receive both, as long as the service-connected disabilities are rated 50% or more in combination. DFAS notes that “CRDP” isn’t a term the law uses, and DoD’s finance regulation now calls it concurrent military retirement pay and VA disability compensation.

Who is covered:

• Retirees who did not retire for disability: entitled to retired pay and rated 50% or more.
• Chapter 61 disability retirees with 20 or more years of creditable service (or 20 years computed from Guard and Reserve points): covered, but only up to the retired pay they would have received for longevity. Any disability retired pay above that is still waived.
• Chapter 61 retirees with fewer than 20 years: not covered by CRDP. They still waive retired pay dollar for dollar, which is why CRSC matters to them.

Guard and Reserve disability retirees. If you already had your 20-year notice of eligibility for reserve retired pay and were then retired under Chapter 61 with immediate retired pay, DFAS can’t pay concurrent retired pay until you reach the age at which your reserve retired pay would otherwise have started. Your branch of service has to send DFAS that age and your creditable service.

Full since 2014. The law phased CRDP in from January 1, 2004, to December 31, 2013. From January 1, 2014, eligible retirees receive retired pay in full.

Automatic and taxable. VA shares rating information with DFAS, so in most cases DFAS starts CRDP without an application. CRDP isn’t a new payment; it shrinks the waiver, so it is retired pay and taxed like retired pay. A retiree paid at the 100% rate through Individual Unemployability can also receive concurrent retired pay, with the same exception for Chapter 61 retirees under 20 years.

CRSC: combat-related disabilities, from 10%

The law. 10 U.S.C. 1413a pays combat-related special compensation to retirees entitled to retired pay who have a combat-related disability. DFAS lists the conditions: you’re entitled to retired pay, VA rates you at least 10%, your VA pay is being waived from your retired pay, and you apply to your branch of service.

What counts as combat-related. A disability from an injury for which you received the Purple Heart, or one incurred as a direct result of armed conflict, while engaged in hazardous service, under conditions simulating war, or through an instrumentality of war. Your branch of service decides, not DFAS or VA.

How much. CRSC equals the VA compensation for your combat-related disabilities only, and it can’t exceed the amount of retired pay you waive. Chapter 61 retirees have extra limits written into the statute.

Not retired pay, not taxed. The statute says CRSC payments are not retired pay, and DoD’s finance regulation treats them as exempt from federal income tax under 26 U.S.C. 104. Retroactive CRSC can reach back to June 1, 2003; for disability retirees with fewer than 20 years, to January 1, 2008.

Side by side

You can’t have both, and the January open season

Section 1414(d) is short: a retiree eligible for both receives one or the other, never both, and gets a yearly open season to switch. According to DFAS, in the first year you’re eligible for both it applies whichever has the higher gross amount and sends an election form; you have 45 days to switch to the other. After that, the choice is yours each open season, which DoD’s finance regulation places normally between January 1 and January 31. If you do nothing, your current election continues.

A change in your VA rating after open season closes doesn’t reopen the choice; it waits for the next open season, unless keeping the election would create a debt or end the payment.

Which program pays more depends on how much of your rating is combat-related, on taxes and on your retired pay. We don’t recommend one; DFAS’s notice shows the gross amount of each.

DFAS’s “Comparing CRSC and CRDP” page was last updated August 6, 2019. It still describes CRDP as phased in over 10 years. That phase-in ended December 31, 2013, as DFAS’s own CRDP page now says. For current rules, rely on the CRDP and CRSC pages, updated in 2023 and 2024, and on the statutes.

DoD’s regulation and DFAS pages now carry the name Department of War, used by DoD since September 2025; the rules above come from the same statutes.

This is general information, not legal, tax, financial or medical advice. DFAS answers questions about retired pay, your branch of service decides CRSC, and VA decides your rating.

Next step

Estimate your gross retired pay in the military retirement calculator and your VA amount in the VA disability pay calculator. For how VA reaches the combined rating that decides CRDP’s 50% line, see VA disability rates and VA math.

VA ratings drive both programs. Representatives of accredited Veterans Service Organizations help with VA claims at no cost; accredited attorneys and claims agents may charge only after VA decides your initial claim, under a fee agreement filed with VA. VA explains the rules in its accredited representative FAQs↗ and helps you find an accredited representative↗.