Combining Retirement and Disability Compensation

"To the order of me" -- close up view of United States Treasury check (Photo: Flickr/frankieleon)
"To the order of me" -- close up view of United States Treasury check (Photo: Flickr/frankieleon)

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Military retirees who have service connected disabilities are eligible for disability compensation. The type and amount of disability compensation eligibility is based on several factors including the nature of the service-connected disability and the nature of your retirement. You may qualify for more than one program; however you may not receive benefits from more than one program at a time. The following will help you to determine which of these benefits you qualify for and which best suit your needs. 

 

Concurrent Retirement Disability Pay (CRDP) and Combat-Related Special Compensation (CRSC) are programs created by Congress to allow eligible military retirees to receive monthly disability compensation benefits in addition to retired pay.

CRDP is a restoration of retired pay for retirees with service-connected disabilities that was lost due to the VA compensation offset. CRDP is taxed in the same manner as your retired pay, and it is normally considered taxable income. No application is required. Eligible retirees receive CRDP automatically.

CRSC is a special compensation for combat-related disabilities. It is non-taxable, and retirees must apply to their Branch of Service to receive it.

 

Veteran Disability Compensation

If you are a military retiree with a service-related disability you may qualify for monthly benefit payments. These benefits are paid to retirees who are disabled by an injury or disease that occurred while on active duty, active duty for training, or was made worse by active military service. 

As a military retiree you may be required to waive a portion of your military retirement to receive these tax-free benefits. This reduction in military retirement pay is commonly referred to as a VA disability offset. Certain disabled military retirees may be eligible for one of the following programs that restore some or all of the VA disability offset.

Concurrent Retirement and Disability Pay (CRDP)

Concurrent Retirement and Disability Pay (CRDP) is a program that provides certain military retirees a monthly restoration of some or all of their VA disability offset. Qualified military retirees are those with 20 or more years of service who have a service-connected disability of 50% or more. The VA disability compensation is automatically added to your regular retirement pay.

You may be entitled to CRDP if...

  • you are a regular retiree with a VA disability rating of 50 percent or greater. 
     
  • you are a reserve retiree with 20 qualifying years of service, who has a VA disability rating of 50 percent or greater and who has reached retirement age. (In most cases the retirement age for reservists is 60, but certain reserve retirees may be eligible before they turn 60. If you are a member of the Ready Reserve, your retirement age can be reduced below age 60 by three months for each 90 days of active service you have performed during a fiscal year.) 
     
  • you are retired under Temporary Early Retirement Act (TERA) and have a VA disability rating of 50 percent or greater. 
     
  • you are a disability retiree who earned entitlement to retired pay under any provision of law other than solely by disability, and you have a VA disability rating of 50 percent or greater. You might become eligible for CRDP at the time you would have become eligible for retired pay.

Your CRDP payment is a restoration of retired pay. It is taxed and, if applicable, subject to collection actions for alimony, child support, community property, garnishment and government debt just as your retired pay.

Your monthly CRDP amount cannot exceed the lesser of your monthly gross retired pay or VA waiver amount. If you are a disability retiree whose retired pay is calculated using a percentage of disability rather than your years of service, your CRDP cannot exceed the amount your gross retired pay would currently be had it been calculated at retirement using your years of service

Fortunately you do not need to apply, CRDP is automatic. If you qualify you will automatically see an increase in your monthly retirement check.

Additional information is also available at the Defense Finance and Accounting Service (DFAS) web site: http://www.dfas.mil/.

As noted above, your personal CRDP payment rate is determined by several factors. If you have questions you can contact the DFAS by calling toll free 800-321-1080 to learn about your personal CRDP payment rate.

Combat Related Special Compensation (CRSC)

Combat-Related Special Compensation (CRSC) provides military retirees a monthly compensation that replaces their VA disability offset.

You may be eligible for CRSC if you currently receive military retired pay and meet one of the following criteria:

  • You were awarded a Purple Heart with a combined disability rating for Purple Heart Disabilities that is at least 10 percent disabling from June 1, 2003 to present; or
  • You have a combined disability rating for all combat-related disabilities that is at least 60 percent disabling from June 1, 2003 through December 31, 2003; or
  • You have a combined disability rating for all combat-related disabilities that is at least 10 percent disabling from January 1, 2004 to present.

Your branch of service will determine whether or not your disability codes are combat related.

If you are determined to be qualified you will receive your reduced retirement pay plus an additional sum that makes up for part or all of your offset retired pay.

Your CRSC payment is based on percentage of your disability that your Service determines to have been combat related as described above. This percentage may be less than your overall VA disability rating, and consequently the CRSC payment may be less than your offset retired pay.

Your CRSC payment is not a restoration of retired pay. It is a special entitlement payment and is not taxed.

Your monthly CRSC amount cannot exceed the lesser of your monthly gross retired pay or VA waiver amount. If you are a disability retiree whose retired pay is calculated using a percentage of disability rather than your years of service, your CRSC cannot exceed the amount your gross retired pay would currently be had it been calculated at retirement using your years of service

Unlike CRDP, CRSC is not automatic; you will need to apply to your military Service. If you qualify your Service will advise you of your status.

 

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