Combat Related Special Compensation (CRSC)

The Facts Concerning Retired Pay and VA Disability Compensation Military retired pay can be difficult to understand, regardless of the nature of your specific retirement. You may fall into one of several different categories; retired with 20 years or more of service, disability retired, or retired under the Temporary Early Retirement Authority (TERA). Along with this retirement payment, you also may be eligible for Concurrent Receipt of Disability Pay (CRDP) or Combat Related Special Compensation (CRSC), depending on whether or not you have service connected disabilities as rated by the Department of Veterans Affairs (VA). The text below is meant to define the programs and agencies listed above and the application procedure for each. Hopefully this will clear up the confusion that arises when these programs are discussed.

Military retired pay is a benefit for service members who fall into very specific categories. The first category is probably the one most people associate with a military retiree, and that is the completion of 20 years or more of active service. In this case, the retiree is awarded a percentage of their base pay based on years of service, starting at 50% and increasing with total time in service. If you entered Active Duty on or after September 8, 1980 you will fall into the High-36 plan, which awards 50% of base pay for 20 years of active service and increases 2.5% for every year after 20 reaching 75% at 30 years of service. The next category is medical, or disability retirement, and it works in practice very much the same as the High-36 plan, additionally taking into account a disability rating as determined by the service member’s branch of service. The final category is TERA. TERA retirees have between 15 and 20 years of active service and are payed an initial 35% of base pay plus 1% for each year of service over 15. A TERA retiree with 15 years of service receives 35% of base pay. That number goes up to 38% of base pay with 18 years of service, for example. An important note, all of these retirees rate additional benefits such as access to Tricare for family health insurance and PX/Commissary/MWR privileges. All of these forms of retirement pay are also considered taxable income. For more information on military retired pay visit the Department of Defense Military Compensation site at:

VA Disability Compensation Pay is paid by the VA. A service member must apply to the VA for any disabilities incurred through service. The VA will conduct an evaluation and award a percentage for each claimed disability. Disabilities must be found, by the VA, to be service connected to be awarded a disability percentage. When multiple disabilities are claimed, the final disability rating is not purely cumulative. What this means is that 2 separate disabilities rated at 50% do not equal 100%. Rather, the VA starts a service member off as 100% healthy, if you will. They then subtract the highest disability rating, in this case 50%. This leaves the individual with a 50% disability rating, meaning there is only 50% remaining. The VA will then take the next highest disability, another 50% in this case, and take 50% of the remaining. In this case, the second disability will take 50% of the remaining 50% for a net of 25%. This is then added to the first disability calculation- 50% + 25% = 75%, which they then round to the nearest 10 for 80%. VA Disability Compensation also pays the individual for dependents, unlike military retired pay. There is no required length of service in order to file a claim for VA Disability Compensation. Applications can be made by an individual directly with the VA or through a Veterans Service Organization. VA Disability Compensation is not considered taxable income. For more information on VA Disability Ratings see the VA site at:

Retirees who have been found to have Service Connected Disabilities by the VA are eligible to receive CRDP. In basic terms, this means that you will receive your retired pay plus your VA Disability Compensation. To be eligible you must have a Combined VA Disability rating of 50% or greater. There is no application process for CRDP and the Defense Finance and Accounting Service (DFAS) will automatically determine eligibility and begin payment. CRDP is considered your retirement pay if you qualify for both retired pay and VA Disability Compensation, and as such it is considered taxable income. For more information on CRDP see the DFAS site at:

CRSC is a tax free entitlement that must be applied for through your branch of service. CRSC is awarded in the case that an individual’s Service Connected Disabilities are proven to be the direct result of one of the following:

-Armed Conflict

-Hazardous Duty

-An Instrument of War

-Simulated War

If an individual believes their injuries fall into the categories listed above, they will apply to their branch of service and the application will go before a review board. Applications may be submitted directly to the board by an individual or processed through a VSO. Medical records, as well as the application itself will be considered. It is possible for this rating to be different than the Combined VA rating, such as if one or more injuries were not proven to be the direct result of one of the listed categories. DFAS will inform the individual upon receipt of the decision from the branch of service and it is the decision of the individual to receive CRDP or CRSC, but not both. As stated above, CRSC is not considered taxable income. For more information on CRSC see the DFAS and Department of the Navy sites at:;

Navigating retired pay, CRDP, CRSC and VA disability pay can be frustrating and exhaustive. The same question will get different answers from the VA and different VSOs. It seems no one knows the bottom line to some or all of these programs until and unless they have been through the process and can speak from personal experience. I would highly recommend utilizing a VSO that you trust to handle these affairs. I cannot and will not recommend one over another, as my experience has been that all VSOs have good offices and good people and bad ones. The bottom line, in closing, is that my own misinformation cost me money when I retired. Because I did not take the time to thoroughly research all options I ended up paying taxes on CRDP when I should have been receiving CRSC, and then subsequently having to file amended tax returns for 4 years at the state and federal level to attempt to recoup my losses. I was fortunate to run across fellow veterans and good VSOs who took the time to help me, and now I am trying to pay that back in the hopes that it will help someone else and save them from the ordeal that I went through. DFAS has a page dedicated to comparing CRDP and CRSC at: DFAS also has an online tool called a Retirement Disability Pay Estimator at:

If you have any questions, comments, or concerns please email us at

Semper Fi,

Josh Holrath

Hardship Advisor,  38VFR