What Is Concurrent Retirement and Disability Pay?
Before Concurrent Retirement and Disability Pay, or CRDP, became available, military retirees who qualified for VA disability compensation were required to waive their military retirement pay by an amount equal to their VA disability compensation. For example, if you received $1,500 in disability compensation, your retirement benefits would be reduced by $1,500.
CRDP eliminates the VA waiver. Congress enacted the CRDP through the National Defense Authorization Act in 2004. Under this law, you can now receive retirement pay and disability compensation at the same time if you meet all the requirements. CRDP was phased in from 2004 to 2013, with the law fully eliminating the VA waiver for qualifying military retirees in 2014.
The VA should automatically apply CRDP when you receive a disability rating. However, the VA misses it. If you are not receiving your full benefits, you have a right to request a review.
Combat-Related Special Compensation
Combat-Related Special Compensation, or CRSC, is a separate benefit for military retirees who have disabilities connected to combat. Like military retirement benefits, the Department of Defense pays CRSC benefits. However, CRSC is tax-free. Your monthly benefit amount is based on your disability rating.
You cannot receive CRSC and CRDP at the same time. When you receive CRSC, the VA waiver still applies, so your retirement pay is reduced by the amount of your VA disability compensation. You can choose between CRSC and CRDP, and you can switch programs once a year during the open period, which typically occurs in January.
Eligibility Criteria & Key Rules for CRDP
To qualify, you must have served enough years and have received a disability rating of at least 50% for a service-connected condition. You may be eligible if one of the categories below applies to you:
| Type of Retiree | Minimum Years of Service | Minimum Disability Rating |
|---|---|---|
|
20 years | 50% |
*Special rules apply
To determine your combined rating if you have multiple conditions, see our combined rating chart.
Special Rules for Chapter 61 and Reserve/Guard Retirees
If you have retired under Chapter 61 due to a disability, you can only receive CRDP equal to what you hypothetically would have earned through regular longevity retirement had your military career continued. The VA waiver still applies to any additional retirement over that amount, which means your CRDP restoration may be more limited than for other retirees.
If you are a retired Reserve or Guard member, you will have a unique timing issue with CRDP. Unlike active duty retirees who receive retirement pay immediately upon retirement, yours typically begins when you reach retirement age, which is typically 60.
If you were a Ready Reserve member who served on qualifying active duty, your retirement age is reduced by three months for every 90 days served. Once your retirement pay begins, CRDP will be processed automatically if you meet all other eligibility requirements.
How CRDP Works in Practice & Financial Mechanics
Before CRDP, veterans receiving retirement pay did not receive any increase in their monthly pay for disability compensation because the VA waiver offset the retirement pay by the full amount of the disability compensation. CRDP restores the full retirement benefit by eliminating the waiver, allowing eligible military retirees to receive the sum of both benefits, which often makes a significant difference in their monthly income.
Suppose you receive $3,000 in retirement pay and qualify for $1,800 in disability compensation. The table below shows the difference in your monthly award before and after concurrent benefits were allowed:
| Monthly Benefit | Before CRDP | With CRDP |
|---|---|---|
| Retirement pay | $3,000 | $3,000 |
| VA Waiver | -$1,800 | $0 |
| Your Benefit from DoD | $1,200 | $3,000 |
| VA Disability | +$1,800 | +$1,800 |
| Total Monthly Pay | $3,000 | $4,800 |
You may also be entitled to retroactive payments, or back pay, if your disability rating increases. If your rating changes, the Defense Finance and Accounting Service will receive a notification from the VA and audit your account to calculate how much total benefit you should have received since becoming eligible for both programs. This date will be January 1, 2004, if you were receiving retirement pay and had a disability rating of 50% or more before that date. Otherwise, it will be based on the date you became eligible for CRDP.
Combat-Related Special Compensation
You may also be entitled to retroactive payments, or back pay, if your disability rating increases. If your rating changes, the Defense Finance and Accounting Service will receive a notification from the VA and audit your account to calculate how much total benefit you should have received since becoming eligible for both programs. This date will be January 1, 2004, if you were receiving retirement pay and had a disability rating of 50% or more before that date. Otherwise, it will be based on the date you became eligible for CRDP.
Tax & Divisibility Considerations
Since CRDP restores your retirement pay, it is taxable. However, your VA disability compensation and CRSC remain tax-free.
CRDP is considered disposable retirement income when dividing assets during divorce proceedings. If your divorce decree awards some of your retirement pay to a former spouse, the CRDP restoration amount is increased for the division.
CRDP vs CRSC: Which One is Better for You?
Your disability rating and tax situation will generally determine which option is better. The primary differences between the two programs are outlined below:
| Feature | CRDP | CRSC |
|---|---|---|
| Eligibility | 50% or higher disability rating | Combat-related disability rating of 10% or more |
| Application process | Automatic if qualified | Must apply to your branch using DD Form 2860 |
| Taxability | Taxable | Non-taxable |
| Purpose | Restoration of retirement pay for veterans receiving disability compensation | Special compensation for combat veterans |
| Benefit composition | Full retirement pay + VA disability compensation | Reduced retirement pay + VA disability + special compensation |
If your VA disability rating is equal to your combat rating, CRSC is often the better choice because your tax liability will be lower. However, if your combat rating is significantly lower than your disability rating, CRDP may be the better choice. If your disability rating changes, you may benefit from switching programs.
When CRDP May Be the Better Choice
Suppose you are a married retiree receiving $3,000 in monthly retirement pay. You have a 70% VA disability rating and a 50% combat-connected rating. Here is a comparison of your CRDP vs. CRSC benefits:
| If you choose CRDP | If you choose CRSC |
|---|---|
|
Retirement pay: $3,000 Plus VA compensation: $1,908 Your total benefit: $4,908 |
VA compensation: $1,908 Retirement pay: $3,000 Minus VA offset: ($1,908) Net Retirement pay: $1,092 Plus tax-free CRSC: $1,208 Your total benefit: $4,208 |
In this case, CRDP is clearly the better choice, as it provides $700 more per month.
When CRSC May Be the Better Choice
Now, suppose you are a single O-4 retiree receiving $5,000 in monthly retirement pay with a 90% VA disability rating, all combat-related. Here are your benefit options:
| If you choose CRDP | If you choose CRSC |
|---|---|
|
Retirement pay: $5,000 Plus VA compensation: $2,298 Your total benefit: $7,298 |
VA compensation: $2,298 Retirement pay: $5,000 Minus VA offset: ($2,298) Net Retirement pay: $2,702 Plus tax-free CRSC: $2,298 Your total benefit: $7,298 |
The monthly pay appears identical, but the taxable amounts are different. If you choose CRDP, your full $5,000 retirement pay is taxable. The VA waiver eliminates some of your retirement pay, so only $2,759 of your monthly benefits would be taxable. In this case, your tax bill would be much lower under CRSC.
How to Confirm or Correct Your CRDP Status
If you receive retirement pay and VA disability compensation, look for a line item in your DFAS statement that indicates a CRDP restoration. Your monthly pay should be the total of both benefits. Our disability calculator can help you determine how much your disability compensation should be.
If you believe you are entitled to concurrent benefits but are not receiving them, submit a written claim to DFAS using DD Form 827. You can mail the form to DFAS Retired and Annuitant Pay, 8899 E. 56th Street, Indianapolis, Indiana 46249-1300, or fax it to 1-800-982-8459. You can also complete the form and upload it using the Ask DFAS upload tool. You can call DFAS at 800-321-1080 with questions.
Correcting Retroactive Benefit Issues
The DFAS is required to audit your account every time your rating changes to calculate retroactive pay. You should then receive it automatically. If you do not see retroactive adjustments on your monthly statement or the amount is wrong, you can request an audit or review through the Ask Retired Pay tool on the DFAS website.
What To Do Next
CRDP eliminates the old VA waiver that canceled out some of your monthly benefits you had rightfully earned. Now you can receive your full benefits if you receive retirement pay and have a disability rating of 50% or more. Even if you are a retired reservist or Chapter 61 disability retiree, these benefits are available with some limitations.
Your DFAS statements will include CRDP benefits. If your disability rating changes, it should also show retroactive benefits. If either is missing and you believe you qualify for CRDP, request an audit through DFAS.
Before choosing between CRDP and CRSC, check with a reputable tax attorney. At Veterans Guide, we can connect you to qualified advocates who can help. In addition, you can explore our guides on VA disability rating upgrades, CRSC application, and appeals to maximize your benefits.
