Updated 2/12/2013

The Department of Defense (DoD) is, and has been, making extra payments to retirees to overcome some or all the offset from retired pay associated with receipt of disability compensation from the Department of Veterans Affairs (VA). Retirees cannot receive benefits simultaneously under both of these programs. The programs are:

Concurrent Retirement and Disability Payment (CRDP):

This program provides a 10-year phase-out of the offset to military retired pay due to receipt of VA disability compensation. Qualified individuals are those who are retired active or age 60 retired reserve members who also have a combined VA disability rating of 50% or greater. Members retired under military disability provisions (Chapter 61 to title 10 United States Code) must have at least 20 years of service. Today, more than 310,000 retirees are receiving CRDP payments of over $427 million per month.

Effective January 1, 2004: Initial entitlement under the program began on January 1, 2004. Payments were made to nearly 150,000 qualified retirees on February 2, 2004.

Effective January 1, 2005: The 10-year phase-out was eliminated for those individuals actually rated 100% disabled by the VA and they became eligible to receive all of their formerly offset military retired pay.

Effective October 1, 2008: The 10-year phase-out was eliminated for those individuals not rated 100% disabled by VA, but who are paid at the 100% level as "Individual Unemployables" (IUs), and they become eligible to receive all of their formerly offset military retired pay retroactive to January 1, 2005.

Initial Rates: CRDP is part of retired pay and cannot exceed the amount that would be otherwise offset. During CY 2004, CRDP was paid to qualified retirees up to the following maximum amount based on the current monthly VA disability rating:

Phase Out: The above payments are increased each year following 2004, by additionally paying a percentage of the remaining amount of retired pay still being offset for each individual until the offset is completely eliminated in 2014. Therefore, the phase out is progressive. This results in the following schedule of payments:

Special Rules for Chapter 61 Disability Retirees: Members retired for disability under Chapter 61 of title 10 United States Code may be entitled to CRDP only if they have at least 20 years of service qualifying for regular or reserve retirement. Additionally, any disability retired pay that is in excess of retired pay to which that member would be otherwise entitled (i.e., for years of service) remains subject to offset and may not be restored under the CRDP program.

No Application Required: Applications for CRDP are neither required nor accepted. The Defense Finance and Accounting Service (DFAS) will determine CRDP benefits automatically. Retirees who are not receiving payments, but believe they qualify, should contact their Military Department or DFAS to determine the reason for non-payment.

Taxability: This entitlement is taxable.

Information: Additional information is available at the following web site: DFAS

Combat-Related Special Compensation (CRSC) Program

This program provides a special monthly payment equivalent to the offset to military retired pay due to receipt of VA disability compensation determined to be combat-related. Qualified individuals include any military retired members with an offset to retired pay due to VA compensation determined to be combat-related. Today, more than 75,000 retirees are receiving CRSC payments of over $71 million per month.

Effective June 1, 2003: I: Initial benefits were payable only to members with at least 20 years of active duty or equivalent reserve duty (i.e. 7200 points) who had combat-related disabilities totaling a rating of 60% or more, or with a rating of 10% or more for combat-related injuries for which they were awarded a Purple Heart.

Effective January 1, 2004: Eligibility was extended to members with any level of VA rating for combat-related disabilities or Purple Heart which results in an offset to military retired pay. Additionally, eligibility was extended to members receiving Reserve retired pay (i.e., Reserve members at age 60 or younger in certain cases and with 20 "good" years or Reserve members retired under Temporary Early Retirement Authority (TERA)).

Effective January 1, 2008: Eligibility was extended to military disability retirees (i.e., Chapter 61 of title 10 United States Code) and members retired under active duty TERA rules.

Effective January 1, 2013: The method for computing the monetary entitlement for members with military disability retirements under Chapter 61 of title 10 United States Code was changed to ensure no such members were disadvantaged from receiving an increased disability rating.

Special Rules for Chapter 61 Disability Retirees: According to law, members retired for disability under Chapter 61 of title 10 United States Code must have the CRSC entitlement limited to an amount that when combined with any military retired pay remaining after offset for VA disability compensation will not exceed the retired pay they would otherwise be entitled to for retirement computed for years of service (i.e., 2 1/2 percent x years of service x pay base).

Application Required: To receive CRSC benefits, retirees must apply with their Branch of Service on a DD Form 2860. The Service will determine which disabilities, if any, qualify as combat-related. DFAS will pay CRSC based on the current combined disability rating of combat-related disabilities as compensated for the current month by VA. Benefits before January 2004 are based on the VA compensation rate for a "veteran alone" and applicable to only those disabilities determined as combat-related.

Taxability: This entitlement is non-taxable.

Information: Additional information is available at the following sites:

Army

Navy & Marine Corps

Air Force

Services may be contacted at the following addresses and toll-free numbers:

ARMY:

Department of the Army

U.S. Army Human Resources Command

ATTN: AHRC-PDR-C (CRSC), Dept 420

1600 Spearhead Division Avenue

Fort Knox, KY 40122-5402

(Toll free 1-866-281-3254)

NAVY AND MARINE CORPS:

Department of Navy

Naval Council of Personnel Boards

Combat-Related Special Compensation Branch

720 Kennon Street S.E., Suite 309

Washington Navy Yard, DC 20374-5023

(Toll free 1-877-366-2772)

AIR FORCE:

United States Air Force Personnel Center

Disability Division (CRSC)

550 C Street West, Suite 6

Randolph AFB TX 78150-4708

(Toll Free 1-800-616-3775)