Can you receive 100% VA disability and military retirement pay at the same time? At retirement age, honorably discharged veterans can receive military retirement pay through the Department of Defense. At the same time, disabled veterans are entitled to VA disability compensation from the U.S. Department of Veterans’ Affairs. So, can a military retiree receive VA disability compensation and military retired pay concurrently? Unfortunately for most veterans, no. However, there are two limited exceptions to this rule where you can receive both, which we’ll explain below.
Can You Receive 100% VA Disability and Military Retirement Pay?
Generally, retirees cannot receive concurrent military retired pay from the Department of Defense and VA disability compensation.
Under normal circumstances, the VA docks any disability compensation dollar-for-dollar from their military retired pay. Veterans Affairs offices refer to this as the “dollar for dollar waiver.” That simply means veterans who receive retired pay waive a certain amount to receive VA disability compensation.
However, there are two exceptions that allow for concurrent military retirement and VA disability compensation. These programs are referred to as CRDP and CRSC.
What is Concurrent Retirement and Disability Pay (CRDP)?
Concurrent Retirement and Disability Pay (CRDP) refers to eligible military retirees with no VA waiver applied to their benefits. That simply means that the VA won’t dock their concurrent retirement and disability pay at all. Instead, qualified retirees can receive military retired pay at 100% and full VA compensation for service-connected disabilities.
The VA awards automatic CRDP status to any military retirees with at least:
- 20 years of military service
- A 50% VA disability rating for one or more service-connected disabilities
However, the waiver still applies to veterans getting VA disability compensation concurrently with retired pay who cannot meet the above requirements.
What is CRSC (Combat-Related Special Compensation)?
There is one other exception to the rule that will allow veterans to receive concurrent retired pay and VA compensation. This exception is called Combat-Related Special Compensation, or CRSC.
CRSC provides additional monthly tax-free VA compensation to retirees who have combat-related disabilities. As long as the injury is combat-related, a veteran can begin receiving retired pay and VA disability compensation simultaneously.
In order to qualify for CRSC, you must:
- Qualify for military retired pay upon reaching eligibility age, or currently receive those benefits
- Have a VA disability rating of at least 10% from the U.S. Department of Veterans Affairs
- Waive your VA compensation amount from your retired pay
- File a CRSC application with your own military service branch
Not every service-connected disability is due to a combat-related injury. The only disabilities the VA considers as combat-related injuries are those that rise as a direct result of:
- An armed conflict
- Hazardous duty
- Instrumentality of war
- Simulated war
You may also qualify for a retroactive payment on top of your monthly CRSC payments. The Department of Defense Finance and Accounting Service (DFAS) regularly audits accounts for such issues. However, the VA is responsible for paying you back any money you’re owed in a retroactive payment.
CRDP vs. CRSC: Understanding Your Options
Before trying to pursue either CRDP or CRSC, it’s important to understand the financial implications. You can only choose one, even if you qualify for both.
For example, the first thing to consider is that you will owe taxes on CRDP payments. CRSC payments, on the other hand, are tax-free. So why would someone choose CRDP over CRSC if they have to pay additional taxes?
Well, CRDP payments are often higher than CRSC military disability retired pay. In some cases, it makes more financial sense to choose the higher taxable CRDP payments. That’s because your take-home pay amount is still higher than the lower, tax-free CRSC income.
The amount of CRSC pay you receive is highly dependent on what percentage of your disability is combat-related. For example, you could have a VA disability rating of 70% that is all service-connected. However, the VA may decide that only 20% of that overall 70% VA disability rating is combat-related. In this case, your CRSC payment would be based on that 20%, not the overall 70% rating.
At the same time, that means that someone with a higher rating of combat-related disability may be better off choosing CRSC. This is because such a member would get a higher amount of tax-free military disability retired pay.
Every case is different, and which program is more advantageous for you as an individual may also change from year to year. Luckily, you can re-assess every December whether you want to stay on one program, or switch to the other.
Who Can Receive Concurrent Retired Pay?
When can you receive 100% VA disability and military retired pay after you reach normal retirement age? There are a few general guidelines for who qualifies for concurrent eligibility. Generally speaking, you must be a 20+ year retiree currently receiving VA compensation with a disability rating of at least 50%. If the DFA ways you’re entitled concurrent retired pay and disability, they apply this status automatically. There is no additional claim or application process in this case.
There is an exception for those who are Chapter 61 military disability retirees. In most cases, those who qualify for CRDP receive those payments automatically. While those who voluntarily retired based on Chapter 61 may still qualify for concurrent payments, it is not an automatic process.
Examples of Veteran Eligibility Scenarios
Let’s look at two different scenarios in which someone may seek concurrent retirement and VA disability payments.
Let’s say that you are a regular service member that has completed 20 years of active service. You then retired voluntarily in 2020 based on your years of service. You are now entitled to $800 per month in retired pay. Let’s say that you also have a VA rating of 50% that qualifies you for $1200 per month in disability compensation. In this situation, you automatically receive concurrent retired pay ($800) and disability compensation ($1200), no VA waiver required.
Now, let’s say you are a reserve retiree that completed 20 years of service, then you retire under Chapter 61 for disability. You get VA disability compensation based on a 60% rating for a service-connected disability. In this situation, you qualify for immediate retired pay before your normal eligibility age. However, you cannot receive concurrent retired pay and VA disability until after you’ve reached retirement age.
There are special considerations for certain reserve retirees who retire under Chapter 61 for disability before the the member’s eligibility age. You will need to contact your branch of service to determine your normal retirement date. Make sure your branch of service is in contact with DFAS so you can receive concurrent disability retired pay if you qualify. Your branch of service should provide that info directly to the DFAS accounting service. If you believe you’re entitled to concurrent disability retired pay, but don’t receive it, you must submit a written claim to DFAS.
Financial Impact and Considerations of CRDP
There are a few other considerations to keep in mind when you are receiving concurrent payments. For example, the tax responsibilities and other financial implications like divorce and alimony are different for CRDP vs CRSC.
Taxes and Divorce/Alimony
A separation or divorce can also have a financial impact in regards to CRDP and CRSC payments. In the case of CRDP, eliminating the VA waiver restores all taxable retired pay. Further, that restored retired pay is subject to the Uniformed Services Former Spouse Protection Act (USFSPA). This means that you may have to divide any CRDP retired pay during a divorce settlement. This only applies if you and your spouse were married for at least 10 years.
However, you don’t owe taxes on CRSC payments. Therefore, a divorce court cannot order you to split those payments with a former spouse. CRSC payments are also not subject to the USFSPA. That means that in switching to CRSC, a former spouse’s payments may decrease or stop entirely. However, CRSC payments are still subject to garnishment for child support and alimony.
How to Apply for CRDP and Making Annual Decisions About Benefits
You do not need to apply for CRDP. If you qualify for only CRDP, DFAS will process your payments on the usual monthly schedule. If you qualify for both, DFAS or your pay agent will mail you an open season letter so you can decide between CRDP and CRSC.
Then, you determine which program is more financially advantageous for your specific situation that year. If you have difficulty deciding between the two, work with a VA-accredited lawyer to ensure that you make an informed choice.
Working With a VA-Accredited Lawyer
CRDP is important for disabled military retirees because it offers more financial freedom than disability or retired pay alone. And for those who qualify for both CRDP and CRSC, the choice can make a big difference in monthly VA compensation each year.
Not sure where to start and want to ensure you get all the military disability benefits owed to you? Let us put you in touch with a veterans’ disability attorney today for a free consultation.
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Jaclyn Peralez-Fleming is a freelance writer based out of Houston, Texas. She graduated from the University of Texas at Austin with bachelor’s degrees in Spanish and Radio-Television-Film. She is an active writer on several business and personal projects in development, and lives with her husband and two black cats.
