Combat-Related Special Compensation - CRSC - is one of the most commonly confused programs in military retirement. It is not a VA benefit at all: it is a Department of Defense program, created by 10 U.S.C. 1413a, that exists because of how VA disability compensation and military retired pay interact.
The offset problem CRSC addresses
By long-standing law, a military retiree generally cannot collect full military retired pay and full VA disability compensation at the same time. Instead, retired pay is reduced - waived - dollar for dollar by the amount of VA disability compensation received. Because VA disability compensation is tax-free, many retirees waive retired pay on purpose.
Congress created two programs to soften that offset: Concurrent Retirement and Disability Pay (CRDP) and Combat-Related Special Compensation (CRSC). They work differently, and understanding the difference matters.
How CRSC works
Under 10 U.S.C. 1413a, CRSC pays an eligible retiree a monthly amount based on the VA-rated disabilities that the retiree's service branch has determined are combat-related. The statute lists what counts - including disabilities incurred in combat, in the performance of duty under conditions simulating war, through an instrumentality of war, or while engaged in hazardous service.
Unlike CRDP, CRSC is not automatic. The retiree applies to their own service branch's CRSC board, which reviews the service and medical records and decides which disabilities meet the combat-related definition. The Defense Finance and Accounting Service then pays the approved amount - tax-free. The DFAS CRSC page describes the program and links to each branch's application process.
CRSC versus CRDP
CRDP restores waived retired pay automatically for retirees with a combined VA rating of 50 percent or higher - no combat-related determination needed. CRSC has no 50-percent floor, but every disability it covers must be found combat-related, and it requires an application.
A retiree eligible for both cannot receive both for the same period. The services run an annual open season during which eligible retirees elect which program to receive; DFAS generally applies whichever produces the larger payment.
Where VA disability ratings fit
CRSC rides on top of a VA rating - there is no CRSC without an underlying VA-rated disability. That is the connection to the claims process covered in this series: the percentage and service connection come from the VA side, as our step-by-step claim process guide explains, and the combat-related determination comes from the service branch side.
For retirees gathering records for a CRSC application, the same medical evidence that supports the VA rating - diagnoses, nexus opinions, and treatment records - is what the branch CRSC board reviews when deciding whether the disability is combat-related. Our guide on what evidence the VA needs covers how that medical evidence is built.
Where veterans start
Every case is different, and there is no obligation at any step. When veterans want to understand what their records actually support, these are the two most common starting points:
- Medical records review
A licensed physician reviews your records for a $250 flat fee and identifies which conditions the available evidence may support. The fee is refunded in full if nothing supportable is identified.
- Nexus letter
When the records support one, a licensed provider writes the medical opinion that addresses the link between your condition and your service.
How to apply for CRSC
CRSC is not automatic and is not applied for through the VA. Each retiree applies to their own branch of service - Army, Navy, Air Force, Marine Corps, or Coast Guard each run a CRSC board - using that branch's application form and submitting military records, medical records, and the VA rating decision documenting the disability. The DFAS CRSC page links to each branch's specific application process.
The branch board, not the VA, decides whether a given disability meets the statutory definition of combat-related. A disability can be fully service-connected and rated by the VA and still be found not combat-related by the branch board, if the evidence does not show it resulted from combat, hazardous duty, an instrumentality of war, or conditions simulating war.
Taxes and how CRSC is paid
CRSC payments are not counted as taxable income, unlike ordinary military retired pay. DFAS pays CRSC separately from retired pay, generally on the same monthly schedule, once a branch has approved the application and calculated the covered disabilities.
Because eligible retirees must choose between CRSC and CRDP each year during the open season, and because eligibility for either depends on the underlying VA disability ratings, changes to a VA rating - including through the rating increase process - can change which program produces the larger monthly payment.
What CRSC boards look for in the record
Because the combat-related determination is separate from the VA's service connection decision, the records a CRSC board relies on often go beyond what the VA needed. Deployment orders, award citations, incident reports, and unit records that place the injury or exposure in a combat, hazardous-duty, or war-simulating context are the kinds of documentation branch boards look for, in addition to the medical records already used to support the VA rating.
This guide is educational. It summarizes the VA's own published rules and links to the exact sources it relies on. It is not legal or claims advice, and it is not a substitute for an accredited representative, who can advise you about your specific claim. Accredited help is free - search the VA's accreditation database to find a Veterans Service Organization, accredited agent, or attorney.
Frequently asked questions
What is Combat-Related Special Compensation?
CRSC is a Department of Defense program that pays eligible military retirees a tax-free monthly amount to offset some or all of the retirement pay they waive because they receive VA disability compensation - but only for disabilities that are combat-related.
Who is eligible for CRSC?
Under 10 U.S.C. 1413a, the program is for military retirees with at least 20 years of service (or certain medical retirees) who have VA-rated combat-related disabilities and whose retired pay is offset by VA disability compensation. Each service branch decides whether specific disabilities qualify as combat-related.
What is the difference between CRSC and CRDP?
Concurrent Retirement and Disability Pay (CRDP) automatically restores retired pay for retirees with VA ratings of 50 percent or higher - no combat link required. CRSC requires a combat-related determination and an application to your service branch, but it can cover ratings below 50 percent. Eligible retirees receive one or the other, not both, and can choose which each year.
Is CRSC a VA benefit?
No. The VA decides disability ratings, but CRSC itself is applied for through your military service branch and paid by the Defense Finance and Accounting Service.