By law, military retirees cannot receive full retired pay and full VA disability compensation at the same time. For every dollar of VA disability pay you receive, one dollar is withheld from your retired pay — a dollar-for-dollar offset. Both CRDP and CRSC exist to restore some or all of that lost income, but they work differently.
| Category | CRDP | CRSC |
|---|---|---|
| Full Name | Concurrent Retirement & Disability Pay | Combat-Related Special Compensation |
| Purpose | Restores retired pay reduced by the VA waiver | Compensates for disabilities caused by combat-related events |
| Minimum VA Rating | 50% or higher | 10% or higher (combat-related) |
| Application | Automatic — no application needed if eligible | DD Form 2860 — must apply through your service branch |
| Tax Status | Taxable — treated as retired pay | Non-taxable — tax-free compensation |
| Disability Type | Any service-connected disability | Combat-related disabilities only (hazardous duty, combat, war simulation, instrumentality of war) |
| Can Combine? | No — you must elect one or the other. You may switch your election once per year. | |
Each year you can choose between CRDP and CRSC. Because CRDP is taxable and CRSC is tax-free, the best choice depends on your total income and tax bracket. Run the numbers both ways before deciding. DFAS typically opens the election window in November–January.