Congress enacted Public Law 107-314 in 2002 (codified at 10 U.S. Code §1414) which created Combat-Related Special Compensation (CRSC).  CRSC is a variation of concurrent receipt which is paid to a retiree to compensate for military retirement waived to receive a VA disability payment.

Put simply, CRSC can result in eligible retirees receiving both (1) their full disability pay, plus (2) the equivalent of up to their full military retirement.

CRSC vs. CRDP

CRSC serves a similar purpose to Concurrent Retirement and Disability Pay (CRDP) (which is not actually a separate payment retirees receive, but is an accounting mechanism by which the VA waiver is gradually being phased out for retirees with a 50% or higher disability rating).

Both programs compensate for military retirement which is lost due to the VA waiver, but have a few key differences:

1. CRSC requires that the disability be combat-related (see below), whereas with CRDP any service-connected disability is sufficient.
2. CRSC requires only a 10% or greater combat-related disability rating, whereas a retiree is not eligible for CRDP unless the rating is at least 50%.
3. CRSC payments are tax-free, whereas CRDP, since it effectively is just restoring taxable military retirement payments to the retiree, is taxable.
4. CRSC payments are not military retirement, so there is no provision by which family law judges can divide the payments.  They are not exempt from garnishment for child support or alimony, however.  (DFAS FAQ).

Finally, CRSC and CRDP are mutually-exclusive - the retiree can elect either one, but not both of them.  10 U.S. Code §1414(d). It often makes more sense for the retiree to opt for CRDP instead of CRSC - for example a retiree who has a 70% service-connected disability rating, so is receiving substantial CRDP, but only 10% of that rating is combat-related, is probably better off foregoing CRSC. Also note that the retiree can change his/her election each year during an "open season" in December & January.

CRSC Eligibility Requirements

First, the retiree must have a combat-related disability, which pursuant to 10 U.S. Code §1413a(e) means:

• An injury for which the Purple Heart was awarded, or
• The disability is as a direct result of armed conflict, hazardous service (parachute duty, demolition, etc), conditions simulating war (i.e. war games), or through an instrumentality of war.

Note that an injury which simply occurs in a combat zone, but is not actually combat-related (e.g. a servicemember in Iraq permanently damages something while playing volleyball) does not qualify for CRSC.

The other significant requirements to receive CRSC are:

1. The combat-related disability is at least 10%.
2. The retiree is receiving normal military retirement, is medically discharged, be on the Temporary Disability Retired List (TDRL) or be receiving Temporary Early Retirement (TERA).
3. The retired pay is being reduced by a VA waiver.

CRSC Payments

Because CRSC is intended simply to mitigate the effects of the VA waiver, payments are capped at the lower of:

1. The amount of VA disability the retiree would receive for the same disability if it were not combat-related disability (see VA rate table),
2. The amount of the VA waiver in effect.

More Information

CRSC Guidance, a Department of Defense memorandum with exhaustive information about CRSC eligibility and the application process.

Army CRSC Page, the point of contact for soldiers at the U.S. Army Human Resources Command.

Combat-Related Special Compensation Board, the point of contact for the Navy & Marines.

Air Force Personnel Center, the point of contact for airmen.

Personnel Service Division, the link for the U.S. Coast Guard.