Gray Area Retiree Spotlight:
Retiree Disability Entitlements that Reduce the Impact of the VA Waiver

In the December issue of the DFAS Retiree Newsletter, we outlined how Department of Veterans Affairs (VA) disability compensation pay can affect your retired pay. The law requires that a military retiree waive their gross DoD retired pay, dollar for dollar, by the amount of their VA disability compensation pay; this is known as the VA Waiver. In this spotlight, we’ll explore two entitlements: Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP). These entitlements were set up to reduce the impact of the VA waiver on retirees who are eligible.

Concurrent Retirement and Disability Pay (CRDP)
Concurrent Retirement and Disability Pay provides an exemption from part or all of the VA waiver for an eligible retiree. You must first be eligible for retired pay to qualify for CRDP. If you were placed on a disability retirement but would be eligible for military retired pay in the absence of the disability, you may be eligible for CRDP. Under these rules, you may be eligible for CRDP if you have a VA service-connected disability rating of 50 percent or greater, AND one of the following applies:

• You are a regular retiree.

• You are a reserve retiree with 20 qualifying years of service who has reached retirement age.

• You are retired under the Temporary Early Retirement Act (TERA).

• You are a disability retiree who earned entitlement to retired pay under any provision of law other than solely by disability. You might become eligible for CRDP at the time you would have become eligible for retired pay.

Most military retirees do not need to apply for CRDP because the VA shares information about VA Disability Compensation with DFAS. In most circumstances, DFAS is able to determine eligibility for CRDP without the need for the member to submit a written claim. However, in some special circumstances, a retiree will need to provide DFAS with a Statement of Service from their branch of service to be considered for CRDP.

Note: We are aware of changes in the DoD Financial Management Regulations to the title and description of Concurrent Retirement and Disability Pay (CRDP). We are awaiting further guidance prior to making changes to our webpages and other communications. The changes DO NOT affect eligibility or pay. These changes only affect the title and description of this entitlement. 

Special Note on Individual Unemployability (IU)
You are eligible for full concurrent receipt of both your VA disability compensation and your retired pay, if you are a military retiree who meets the above eligibility requirements in addition to both of the following:

• You are rated by the VA as unemployable, generally referred to as Individual Unemployability (IU).

• You are receiving VA disability compensation as a result of IU.

Combat-Related Special Compensation (CRSC)
Combat-Related Special Compensation (CRSC) is a bit more complicated than CRDP. The four criteria listed below must be met. They are similar to those for CRDP, but the service-connected disability rating is a minimum of 10% and it must be for a combat-related disability. Disabilities that may be considered combat-related include injuries incurred as a direct result of simulating war, hazardous service, instrumentality of war, or armed conflict.
Unlike CRDP, you must apply for CRSC through your branch of service.

To qualify for CRSC you must:

• Be entitled to and/or receiving military retired pay
   
• Have a VA service-connected disability rating of at least 10 percent that is combat-related
   
• Waive your VA pay from your retired pay
   
• File a CRSC application with your Branch of Service

Eligibility for Both CRDP and CRSC
It is possible to be eligible for both CRDP and CRSC. However, you are only entitled to one at a time. If you become eligible for both, DFAS will automatically apply the entitlement that is most beneficial to you based on the gross amount of each and send you a letter with a form to return if you wish to change. If you’re eligible for both, there is also an open season each year, usually in January, when you can choose to change your election.

Want to Know More About CRDP and CRSC?
Please note that the information in this spotlight is a summary; individual circumstances vary and entitlement eligibility is complex. Please consult your Branch of Service for specific details or assistance. There is more information on the DFAS website at: https://www.dfas.mil/vawaiver.


Note: The information on this website is provided to explain typical situations regarding retiree and annuitant benefits. For details and exceptions, please see applicable laws, financial management regulations, and instructions.
 

Page Updated Mar 26 2025