What Is Combat-Related Special Compensation (CRSC)?

Combat-Related Special Compensation is a tax-free monthly payment that restores the retired pay a military retiree gives up to receive VA disability compensation, when at least one of those disabilities is tied to combat. Federal law normally requires a dollar-for-dollar waiver of retired pay against VA disability pay, which means retirees effectively fund their own disability benefit out of the retirement they earned.¹ CRSC fills that gap for combat-connected disabilities, and because it isn’t taxable, the same gross figure goes further than an equal amount of retired pay would.²

Who Qualifies

Under 10 U.S.C. § 1413a, you must meet four conditions:

You are entitled to retired pay. That includes longevity retirees with 20 or more years of service, Chapter 61 medical retirees, and those who left under the Temporary Early Retirement Authority.
You have a current VA disability rating of at least 10 percent.
Your retired pay is actually being reduced by the VA waiver. If nothing is being waived, there is nothing for CRSC to restore.
At least one of your disabilities is combat-related, as determined by your branch of service.

Every uniformed service is covered, including the Coast Guard, the Public Health Service Commissioned Corps, and NOAA.³ Reserve and National Guard retirees become eligible when they reach age 60 (or the reduced eligibility age, if it applies) and start drawing retired pay.⁴ Eligibility continues as long as the VA rating for the combat-related condition stays in effect.

What Counts as Combat-Related

The VA rating alone doesn’t make a disability combat-related. Your branch review board decides that separately, matching each claimed condition to one of four Department of Defense categories. One category is enough.³

Armed Conflict

Injuries from direct engagement with hostile forces during war, skirmish, raid, invasion, or guerrilla action. Gunfire, shrapnel, and IED wounds all fit. A Purple Heart is essentially a fast pass, because the award itself documents a combat wound.

Hazardous Duty

Certain assignments carry inherent danger with no civilian equivalent: parachute duty, demolitions, flight operations, experimental stress duty, and military diving. The injury has to result from the hazardous nature of the duty, not just occur while you were assigned to it. A broken ankle on a jump qualifies. A sprain walking to the rigger shed does not.

Instrumentality of War

Disabilities caused by military-specific equipment used for its intended purpose: weapons malfunctions, tactical vehicle accidents, exposure to military ordnance, and illness from toxic agents such as Agent Orange or burn pit emissions.³ PACT Act presumptive conditions often fit here, though the branch board still makes the combat-connection call.

Simulated War

Injuries from training exercises built to replicate combat: live-fire drills, force-on-force exercises, and field maneuvers with tactical scenarios. Routine PT and garrison activity don’t count, even on a military installation.

How Much CRSC Pays

The monthly amount is based on the VA compensation rate that corresponds to your combat-related disabilities specifically, not your overall VA rating. If your combined rating is 70 percent but only 40 percent of it is combat-related, CRSC uses the 40 percent rate from the VA compensation tables.⁵

There is a hard ceiling. CRSC cannot exceed the retired pay you are actually waiving. If the VA rate for your combat-related conditions works out to $795 a month but the VA waiver only takes $500 from your retired pay, your CRSC is $500.

Chapter 61 medical retirees with fewer than 20 years of service face a further cap: combined retired pay and CRSC cannot exceed what your retired pay would have been calculated on years of service alone.⁵ In practice, CRSC is reduced by the difference between disability-based retired pay and years-of-service retired pay.⁶ That can shrink the payment substantially for retirees who left early on medical grounds.

CRSC vs. CRDP

Concurrent Retirement and Disability Pay is a separate program that also restores the retired pay lost to the VA waiver. Some retirees qualify for both, but you cannot collect both at once.⁴ The key differences:

CRDP requires a combined VA rating of at least 50 percent. CRSC requires only 10 percent.
CRDP requires 20 years of creditable service. CRSC has no minimum service length beyond retired-pay entitlement.
CRDP does not require a combat link. CRSC does.
CRDP is taxable, because it flows back through retired pay. CRSC is tax-free and arrives as a separate payment.⁷

The tax treatment is where the choice gets interesting. A higher CRDP figure on paper can produce less take-home than a lower CRSC figure once federal and state income tax is applied, especially in a higher bracket. Run both numbers before deciding.

If you qualify for both, DFAS holds an annual open season each January and mails eligible retirees a letter comparing the two payments.⁸ Miss the deadline and you stay on whichever program you were already receiving. The election isn’t permanent; you can switch again the following January.

How to Apply

Applications go to your branch of service, not the VA and not DFAS. Each branch runs its own review board.⁹

Start with DD Form 2860, the official CRSC claim form, available on the DoD forms site or your branch’s HR page. Complete and sign it. Unsigned forms are not processed.

The evidence attached to the form is what decides the claim. At a minimum, include:

Your DD-214 or DD-215 to verify service dates and retirement status.
Retirement orders showing how and under what authority you retired.
Your VA rating decision listing each service-connected disability, its diagnostic code, and its percentage. This is what the board uses to identify candidates for combat-relatedness.
Medical records from the time of injury. Line-of-duty determinations, field hospital records, and contemporaneous treatment notes carry far more weight than documents created years later.¹⁰
Combat-related evidence: Purple Heart citations, Combat Action Badges, Combat Infantry Badges, after-action reports, unit morning reports, and deployment evaluations.

The most common reason a claim stalls is thin evidence tying the specific disability to one of the four combat categories. A VA finding that a condition is service-connected does not, on its own, establish a combat connection. Signed witness statements from your chain of command, with contact information for verification, can help when official records are gapped.

Mailing addresses by branch, current as of 2026:⁹

Army: U.S. Army Human Resources Command, ATTN: CRSC Division, 1600 Spearhead Division Avenue, Fort Knox, KY 40122.
Navy and Marine Corps: Secretary of the Navy Council of Review Boards, Combat-Related Special Compensation, 720 Kennon Street SE, Suite 309, Washington Navy Yard, DC 20374-5023.
Air Force and Space Force: HQ AFPC/DPFDC (CRSC), 550 C Street West, JBSA Randolph, TX 78150. Electronic submission is also available.
Coast Guard: Commander (PSC-PSD-MED), Personnel Service Center, ATTN: CRSC, 2703 Martin Luther King Jr. Avenue SE, Washington, DC 20593-7200.

After You Apply

The branch board first checks administrative eligibility, then reviews each claimed disability against the four categories using your medical evidence and service records. Processing times vary by branch and depend on claim volume and complexity. After the branch approves the claim and sends the decision to DFAS, the first CRSC payment typically issues within about 60 days, though complex cases take longer.¹¹

DFAS calculates the monthly amount from VA and branch data and pays CRSC as a separate line item.³ You get two deposits each month: taxable retired pay and tax-free CRSC.⁷

On approval, DFAS determines whether retroactive CRSC is owed back to your first date of eligibility. In a 2024 decision, the Supreme Court held that the six-year statute of limitations in the Barring Act (31 U.S.C. § 3702) does not apply to CRSC, so retroactive payments can now reach the full eligibility date rather than being capped at six years.

A later VA rating increase does not automatically raise your CRSC or trigger retroactive pay for the earlier period.¹²

If Your Claim Is Denied

A denial isn’t the end. Request reconsideration from the same branch office that reviewed the claim. The denial letter usually explains the reasons and points to the right form: Army CRSC Form 12e; an Air Force reconsideration form enclosed with the decision; a downloadable Navy form; a plain letter for the Coast Guard.¹⁰

New evidence is what changes an outcome. Resubmitting the same file will produce the same denial. Buddy statements, unit deployment records, and medical documentation that ties a disability to a specific combat event or hazardous duty assignment are what carry weight on the second look.

If reconsideration fails, you can appeal to your branch’s Board for Correction of Military Records using DD Form 149.¹³ That board can correct record errors that are blocking approval, such as a missing line-of-duty determination or a deployment that never made it into your file. Exhaust branch-level reconsideration first.

Effect on the Survivor Benefit Plan

SBP coverage does not change if you receive CRSC. Premiums normally come out of retired pay, and if CRSC reduces retired pay below the premium amount, the remaining premium is deducted from your CRSC payment instead.¹⁴ Your spouse and dependents stay covered whether you receive CRSC or CRDP.⁷

1
Defense Finance and Accounting Service. VA Waiver and Retired Pay–CRDP–CRSC
2
Internal Revenue Service. Armed Forces Tax Guide
3
Defense Finance and Accounting Service. Combat-Related Special Compensation Program Guidance
4
Defense Finance and Accounting Service. Comparing CRSC and CRDP
5
Office of the Law Revision Counsel. 10 USC 1413a – Combat-Related Special Compensation
6
The Official Army Benefits Website. Combat-Related Special Compensation (CRSC)
7
Defense Finance and Accounting Service. CRDP-CRSC-FAQs
8
Defense Finance and Accounting Service. CRDP/CRSC Open Season – Frequently Asked Questions
9
Defense Finance and Accounting Service. Apply for CRSC
10
Veterans Affairs. Combat-Related Special Compensation (CRSC)
11
Defense Finance and Accounting Service. Retired and Annuitant Pay Processing – How Long Does It Take
12
Defense Finance and Accounting Service. Combat-Related Special Compensation Program GuidanceCRDP-CRSC-FAQs
13
U.S. Army Human Resources Command. Reconsiderations Reviews and Updates
14
Department of Defense. Financial Management Regulation Volume 7B, Chapter 63