https://crsreports.congress.gov
Updated October 20, 2022
Defense Primer: Concurrent Receipt of Military Retirement and
VA Disability
Concurrent receipt refers to a veteran’s simultaneous
receipt of two types of monetary benefits: military retired
pay from the Department of Defense (DOD) and disability
compensation from the Department of Veterans Affairs
(VA). Prior to 2004, existing laws and regulations
stipulated that a military retiree could not receive both
payments concurrently. As a result, military retirees with
disabilities recognized by VA would incur a retired pay
offset (i.e., dollar-for-dollar reduction) by the amount of
their VA compensation.
The FY2003 and FY2004 National Defense Authorization
Acts (NDAA) authorized, for the first time, two separate
and distinct concurrent receipt benefits, Combat Related
Special Compensation (CRSC), and Concurrent Retirement
and Disability Payments (CRDP).
To be eligible for concurrent receipt under these programs
all recipients must be eligible for both (1) military retired
pay and (2) VA disability compensation. An eligible retiree
cannot receive both CRDP and CRSC. The retiree may
choose whichever is most financially advantageous to him
or her and may change benefit election during an annual
open season. According to the DOD Actuary, in FY2021,
approximately 42% of all military retirees collecting retired
pay were either receiving CRDP or CRSC.
Table 1. Comparison of CRSC and CRDP
Source: Derived from Defense Finance and Accounting Service.
Concurrent Retirement and Disability
Payments (CRDP)
CRDP was first authorized in the FY2004 NDAA and was
phased in over a 10-year period between 2004-2013. CRDP
is sometimes referred to as restored retired pay, as it
exempts certain members from the offset of VA payments
normally required under 38 U.S.C. §§5404 and 5405. Under
this offset, a retiree is required to waive retired pay in the
amount of VA disability compensation they are eligible to
receive. As VA disability compensation is nontaxable,
waiving retired pay generally provides a net financial
benefit.
CRDP authorizes military retirees with at least a 50%
service-connected disability as rated by VA to receive full
military retired pay and VA disability compensation
without offset (see Figure 1Figure 1). There are currently
two groups of retirees who are not eligible for CRDP
benefits. The first group is non-disability military retirees
with service-connected disabilities (not combat-related) that
have been rated by VA at 40% or less. The second group
includes disability (Chapter 61) retirees with service-
connected disabilities and fewer than 20 years of service
(YOS).
Figure 1. CRDP Eligibility Flowchart
Source: CRS analysis of statute.
Notes: “Member” refers to a retired member of the Armed Forces.
Temporary Early Retirement Authority (TERA) retirees are those
retired with less than 20 years of service due to force management
requirements. Disability ratings are awarded in 10% increments.
Combat Related Special Compensation
CRSC is considered special compensation and not restored
retired pay. Under CRSC, the retired pay offset still applies
to receive VA disability compensation; however, CRSC
reimburses the member for some, or all, of the offset. The
amount of CRSC depends on the percentage of the
disability that is combat related (CRSC rating) and may not
exceed the reduction in retired pay. These factors make the
calculation of CRSC more complex than CRDP, as every
veteran’s situation may be different. It may be easiest to
think of the total CRSC benefit as three separate payments,
(1) retired pay from DOD minus VA disability payment
