VA disability and retired pay: CRDP vs. CRSC
By a Navy veteran. Updated October 2026.
Short answer: By default, VA disability pay reduces your military retired pay dollar for dollar. CRDP and CRSC are the two programs that let eligible retirees receive both. You can only get one of them, and they are taxed differently.
The problem: the VA waiver
Federal law says you cannot receive both full retired pay and VA disability compensation unless you give up (waive) part of your retired pay equal to your VA payment. The waiver reduces only your DoD retired pay. It does not change the amount VA pays you.
CRDP: Concurrent Retirement and Disability Pay
- Who qualifies: retirees entitled to both retired pay and VA disability compensation, with a VA rating of 50% or higher. Chapter 61 (medical) retirees also need 20 or more years of service, and their concurrent pay is capped at what a longevity retirement would have paid.
- How to get it: usually you do not apply. VA shares your rating with DFAS, which starts payments. If you believe you qualify and are not being paid, DFAS says to send a DD Form 827.
- Result: since January 1, 2014, eligible retirees can receive full retired pay along with VA compensation.
- Taxes: CRDP is paid as retired pay, so it is taxable.
- Back pay: if your rating rose after you started retired pay, you may be owed retroactive pay. DFAS can go back as far as January 1, 2004, subject to limits.
CRSC: Combat-Related Special Compensation
- Who qualifies: you must be entitled to or receiving military retired pay, be rated at least 10% by VA, and have a disability that is combat related. Your branch of service decides what counts. Disabilities that may qualify come from armed conflict, hazardous duty, an instrumentality of war, or simulated war.
- How to get it: you must file a CRSC application with your branch of service. It is not automatic. CRSC is paid in place of the retired pay you waive for your VA pay.
- Taxes: CRSC is a tax-free entitlement, paid each month separately from your retired pay.
- Back pay: DFAS audits your account for retroactive pay. It can go back as far as June 1, 2003, but is limited by your CRSC start date, Purple Heart eligibility, retirement date and retirement law. Disability retirees with under 20 years are limited to January 1, 2008.
CRDP vs. CRSC
| CRDP | CRSC | |
|---|---|---|
| Based on | VA rating of 50% or higher | VA rating of 10% or higher, with a combat-related disability |
| Apply? | Usually automatic | Yes, through your branch of service |
| Paid as | Retired pay | Separate payment |
| Taxable? | Yes | No |
If you qualify for both
You can receive only one. DFAS sends an annual Open Season letter, usually in January. To switch, return the signed form and check the “change my entitlement” box by the deadline. You cannot switch mid-year, even if your amounts change. The 2026 Open Season ran January 1 to 31. DFAS retiree help is 800-321-1080.
Because CRSC is not taxed and CRDP is, the better choice depends on your amounts and your tax situation. A tax professional can run both.
Why it matters for your plan
If you are planning retirement, your retired pay may be reduced by the VA waiver, or restored through CRDP or CRSC. Use the amounts DFAS shows you, not an estimate, when you build your budget.
Put it on one timeline
The free planner lays your retired pay, VA pay and state tax out month by month for your first 24 months.
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