CRDP vs CRSC: Two Ways to Restore Waived Retired Pay

Why there is a waiver in the first place

DFAS's CRDP page states the general rule: a military retiree may not receive VA disability compensation and military retired pay concurrently. The retiree waives retired pay, dollar for dollar, to receive the VA payment. The statutes DFAS cites are 38 U.S.C. 5304 and 5305.

VA compensation is untaxed. Retired pay usually is not. For decades the waiver was the whole story. CRDP and CRSC are the limited exceptions that put some or all of that waived retired pay back in a retiree's pocket, in two different legal forms.

DFAS says it plainly: you may qualify for both types of payments, but you can receive either CRDP or CRSC, not both.

CRDP: restored retired pay, usually automatic

DFAS's current CRDP explanation (page updated July 17, 2023, when fetched) is more precise than the older comparison chart.

Longevity retirees (not Chapter 61). To receive retired pay and VA compensation concurrently, the member must be entitled for the month to both, and have a service-connected disability or combination rated by VA as not less than 50 percent.

Chapter 61 disability retirees. Concurrent receipt requires 20 or more years creditable under 10 U.S.C. 1405, or 20 years computed under 10 U.S.C. 12732, plus entitlement to both pays for the month, plus a VA rating of not less than 50 percent. A Chapter 61 retiree without that 20-year creditable service is not eligible for concurrent receipt and remains under the dollar-for-dollar waiver.

The 10-year phase-in ran from January 1, 2004, through December 31, 2013. DFAS says that as of January 1, 2014, qualifying non-Chapter-61 retirees may receive military retired pay in full concurrently with VA compensation. Chapter 61 retirees with 20 years still waive the amount by which disability retired pay exceeds hypothetical longevity retired pay. The longevity-equivalent piece can be concurrent. The extra disability-retired amount stays subject to 5304 and 5305.

Reserve and Guard members retired under Chapter 61 before reaching retired-pay eligibility age are not paid concurrent retired pay until they reach the age they would have needed for ordinary retired pay. The branch has to send DFAS the eligibility age and creditable service.

CRDP is not a new benefit check with a new name on the statute. DFAS says the law does not even use the term. It is the right to keep retired pay that would otherwise be waived. The comparison page still describes CRDP as an increase in retired pay that reduces the VA waiver. It is taxable according to the retired-pay withholding rate. It is subject to division with a former spouse. SBP premiums come out of it.

No application is required in the ordinary case. VA shares rating and payment data with DFAS. If you think you qualify and you are not seeing it, DFAS tells you to file a written claim on DD Form 827.

I am not reprinting DFAS's hypothetical $800 retired pay / $1,200 VA example as if it were your 2026 rates. It is an illustration of the structure on their page, not a current pay table.

CRSC: special compensation, application required

DFAS's CRSC page (updated June 25, 2024, when fetched) lists four gates:

1. Entitled to and/or receiving military retired pay
2. Rated at least 10 percent by VA
3. Waive VA pay from retired pay (the ordinary offset)
4. File a CRSC application with your branch of service

Disabilities that may be considered combat-related include injuries incurred as a direct result of armed conflict, hazardous duty, an instrumentality of war, or simulated war.

CRSC is a tax-free entitlement paid each month along with any retired pay you are already receiving. It is special compensation, not retired pay. CRS Report R40589 matches DFAS on the tax point and on the former-spouse point: CRSC is not subject to division with a former spouse the way retired pay is. It can still be garnished for alimony or child support.

The branch, not VA, decides whether a VA-rated disability is combat-related for CRSC. A VA service-connection grant is not a CRSC grant. You still apply.

Retroactive CRSC can go back as far as June 1, 2003, limited by the branch's CRSC start date, Purple Heart rules, retirement date, and retirement law. Disability retirees with less than 20 years are limited to a retroactive date of January 1, 2008.

You pick one. DFAS will not pay both.

The comparison page says retirees cannot receive both. In the first year of joint eligibility, DFAS applies the entitlement that is most beneficial based on the *gross* amount. You get an election form. Return it within 45 days if you want the other one. After that, the choice is yours during Open Season, which DFAS says usually takes place in January.

Gross is not net. CRDP is taxable. CRSC is not. A larger CRDP gross can be a smaller net after withholding. DFAS will not do your tax return. Compare the two with someone who can read your actual retired-pay tax situation, including SBP, former-spouse deductions, and state tax.

The comparison chart still has a row that says CRDP concurrent receipt was "phased in over 10 years (from 2004 to 2014)." That row is historical. The dedicated CRDP page is the current computation: phase-in over, full concurrent for qualifying longevity retirees since January 1, 2014, with the Chapter 61 limit described above. When the two DFAS pages disagree on that point, use the dedicated CRDP page.

The comparison chart's CRSC reservist line is also messier than the dedicated CRSC eligibility list. For eligibility, use the dedicated CRSC page's four gates and your branch's CRSC instruction.

Who usually sits in which lane

CRDP-only facts. Twenty-year retiree, VA combined 50 percent or higher, disabilities that are service-connected but not combat-related. No application. Taxable restored retired pay.

CRSC-only facts. Retired pay, VA rating at least 10 percent, combat-related disabilities approved by the branch, and no CRDP eligibility (for example, a Chapter 61 retiree under 20 years, or a longevity retiree under 50 percent). Application required. Nontaxable special pay.

Both-eligible facts. Twenty-year retiree, VA 50 percent or higher, and some or all disabilities approved as combat-related. You still receive only one. Run the gross-versus-net comparison. Revisit it in January if the VA rating or the combat-related percentage changes.

A 100 percent rating does not, by itself, choose the lane. CRDP cares about 50 percent and retired-pay status. CRSC cares about combat-relatedness and the branch application. P&T benefits are a different list.

What this post will not do

It will not invent a 2026 CRDP or CRSC payment table. DFAS and VA do not publish a single household table for these restorations the way VA publishes the compensation rates. Your restored amount is a function of waived retired pay, VA compensation, combat-related percentages, and Chapter 61 limits.

It will not treat CRSC as a VA claim. The application goes to the branch.

It will not treat a VA combat presumption under 1154(b) as a CRSC approval. Different agency, different definition of combat-related.

FAQs

Do I apply to VA for CRDP?

No. DFAS says CRDP is processed when VA notifies DFAS of your compensation, if you are eligible. If it is missing, DFAS wants a DD Form 827 claim, not a VA 21-526EZ.

Do I apply to VA for CRSC?

No. You apply to your branch of service. VA's rating is an input. The combat-related decision is the branch's.

Can I receive CRDP and CRSC in the same month?

No. DFAS and CRS both say you receive one or the other.

I am a Chapter 61 retiree with 12 years. Do I get CRDP?

DFAS says a Chapter 61 retiree without 20 years creditable under 1405 or 12732 is not eligible for concurrent receipt and remains under the waiver. CRSC may still be available if you meet the CRSC gates and the branch approves combat-related disabilities.

Is CRSC taxable?

DFAS says CRSC is nontaxable. CRDP is taxable as retired pay. Confirm with the current LES and a tax professional. This is not tax advice.

When can I switch?

DFAS: first-year election form within 45 days if you want the one DFAS did not pick; later, Open Season, usually January.

Sources

• DFAS: Concurrent military retired pay and VA disability compensation (CRDP)
• DFAS: Combat-Related Special Compensation
• DFAS: Comparing CRSC and CRDP
• DFAS: VA waiver, CRDP, and CRSC
• CRS R40589
• 10 U.S.C. 1413a (CRSC); 10 U.S.C. 1414 (CRDP); 38 U.S.C. 5304, 5305 (waiver)

Disclaimer: Educational content only. Not legal or medical advice. Confirm against the veteran's actual notice and current eCFR / VA.gov. For claim-specific help, use a VA-accredited VSO, claims agent, or attorney.