Until 2004, it was against the law for military retirees to receive both full retirement pay and VA disability compensation at the same time. Instead, they had to offset their military retirement pay with the amount of money they received from the VA.
That changed with CRDP. This article will explain what CRDP is and how it works.
What is CRDP?
CRDP is one form of concurrent receipt. The other is CRSC (Combat-Related Special Compensation). CRDP and CRSC are both designed to restore the amount of your Service retired pay that’s docked when you receive VA disability compensation, and they both make up for the money that is withheld by the VA waiver. Unlike CRDP, CRSC is a tax-free payment.
Previously, military retirees were forced to choose between their retirement pay and their disability compensation. This choice was often financially difficult.
CRDP is an important program that prevents military retirees from having to make this choice. It also helps ensure that veterans who have service-connected disabilities are properly compensated for their injuries and losses. In order to successfully claim CRDP, it is essential for veterans to gather as much evidence as possible and seek assistance from qualified representatives. They should also be prepared to submit a request for reconsideration if their claim is denied. The attorneys at Hill & Ponton are ready to support veterans throughout this process.
How does CRDP work?
Typically, if you receive VA disability compensation your DFAS (Department of Defense Accounting Service) retirement pay will be docked dollar-for-dollar by the amount of your monthly military disability benefit. This is called the VA waiver or VA offset. CRDP eliminates the VA waiver and allows you to keep your full military retirement pay.
DFAS and the VA work together to make this happen. During open season each December you’ll get a letter from your DFAS pay agent telling you about the CRDP and CRSC programs.
CRDP is being phased in over a 10-year period and will eventually allow all 20(+) year retirees with a 50% or greater VA rating to maintain their full military retired pay and their full VA disability compensation payments. You don’t need to apply for CRDP or submit any documentation, as you will be automatically enrolled if you meet the qualifications. Unlike CRSC, CRDP is not tax-free. This is because CRDP is considered an additional compensation payment and not an untaxed disability pension.
What is CRSC?
CRSC is one form of concurrent receipt, a benefit that returns military retirement pay that was docked by VA disability compensation. This payment is a tax-free entitlement, and it’s also exempt from court-ordered division in divorce cases. PTSD and major depressive disorder are among the conditions that qualify for this program, along with any other service-connected disability that is rated at 10% or above. You must apply with your branch of service, which will assess your eligibility and explain the required supporting documentation.
This includes official service medical records that prove the severity of your condition and show a causal link between the injury and your combat-related activity. The 2008 National Defense Authorization Act expanded CRSC eligibility to include TERA, TDRL, and Chapter 61 retirees. You can find the DD Form 2860 and more information about this entitlement at your service’s website. The nexus between your service-related disability and combat related activity must be established through documentary evidence, and the amount you receive will depend on your rating.
How much money will I receive for CRSC?
If you’re eligible for CRSC, your monthly payments will be deposited directly to your account and will be tax-free. The amount you receive will be based on the percentage of your disability that your Service determines was combat related. It may be less than your overall VA disability rating.
Unlike CRDP, which restores the portion of your taxable retirement that was offset by your VA compensation, CRSC is a separate payment and will not be reflected on your retired pay stub. CRSC is not a benefit from the VA, but rather from your military branch of service.
Military organizations and lobbyists have been pushing to get the concurrent receipt laws expanded, but it is still not available for everyone. If you want to switch between CRDP and CRSC, you can do so during open season (January 1 – 31 every year). DFAS will send you a letter with the projected amount you’ll be paid under each program.