Concurrent receipt of military retired pay lets eligible retirees collect their full military retirement and their full VA disability compensation at the same time, instead of trading one dollar of retired pay for each dollar of VA compensation. The program that makes this possible is Concurrent Retirement and Disability Pay (CRDP), authorized under 10 U.S.C. § 1414 and fully phased in since January 2014.1GovInfo. 10 USC 1414 – Members Eligible for Retired Pay Who Are Also Eligible for Veterans Disability Compensation for Disabilities Rated 50 Percent or Higher If you qualify, you no longer waive retired pay to receive your VA benefit.
Federal law generally bars a veteran from drawing military retired pay and VA disability compensation for the same service under 38 U.S.C. § 5304.2Office of the Law Revision Counsel. 38 USC 5304 – Prohibition Against Duplication of Benefits To receive VA compensation, retirees had to waive an equal amount of retired pay. CRDP works by restoring that waived retired pay on top of the VA payment, so the retiree ends up with both.
Who Qualifies
Two things determine eligibility: a combined VA disability rating of 50 percent or higher, and military retired pay you are currently drawing.3Department of Defense. Concurrent Retirement and Disability Payments and Combat-Related Special Compensation Within that, four categories of retirees are covered:
- Regular retirees with 20 or more years of active-duty service.
- Reserve retirees with 20 qualifying years who have reached retirement age (typically 60, though certain deployments can reduce that) and are drawing retired pay.
- Temporary Early Retirement Authority (TERA) retirees who left with fewer than 20 years under that program.
- Chapter 61 disability retirees, but only if they also have 20 or more years of service that would have qualified them for a regular retirement.4Office of the Law Revision Counsel. 10 USC 1414 – Section (b) Special Rules for Chapter 61 Disability Retirees
That last category is where retirees most often misread the rules. A service member medically retired under Chapter 61 after 8 or 12 years does not qualify for CRDP, because the statute excludes Chapter 61 retirees with fewer than 20 years of creditable service.5Office of the Law Revision Counsel. 10 USC 1414 – Section (b)(2) Disability Retirees With Less Than 20 Years of Service Those retirees may still qualify for Combat-Related Special Compensation instead, which uses different rules.
How the Payment Is Calculated
CRDP restores the exact dollar amount of retired pay you waived to receive VA compensation. If your monthly retired pay is $3,000 and your VA disability compensation is $1,500, before CRDP you waived $1,500 of retired pay and ended up with the same $3,000 total. With CRDP, you keep the full $3,000 in retired pay and the full $1,500 in VA compensation, for $4,500 a month.
Both figures adjust annually through cost-of-living adjustments, and the CRDP restoration rises with them.
Enrollment and What Happens When Your Rating Changes
You do not apply for CRDP. DFAS enrolls eligible retirees automatically once the VA disability rating and retired pay records align in the system.6MyArmyBenefits. Concurrent Receipt (CR)
Because eligibility rides on the VA rating, a rating change moves you in or out of the program. Filing a claim for increase that pushes your combined rating to 50 percent or higher triggers automatic enrollment, though a lag of several weeks to a few months between the VA decision and DFAS action is common. A re-evaluation that drops your combined rating below 50 percent has the opposite effect: the VA waiver returns and you go back to the dollar-for-dollar trade-off.
The effective date of a rating increase sets how far back CRDP restoration reaches. If the VA dates the increase to a point in the past, DFAS owes retroactive CRDP for the months you were eligible but not yet enrolled. The VA generally dates an increase to the earliest evidence of worsening if you file within one year of that date; file later and the effective date is typically the date the VA received the claim.7U.S. Department of Veterans Affairs. Disability Compensation Effective Dates Retroactive CRDP back pay can be a substantial lump sum when a rating change covers many months.
CRDP or CRSC: The Choice That Matters Most
Congress created two concurrent receipt programs, and confusing them is the most common mistake retirees make. CRDP covers any service-connected disability rated at 50 percent or higher. Combat-Related Special Compensation (CRSC), authorized under 10 U.S.C. § 1413a, covers only disabilities tied to armed conflict, hazardous duty, conditions simulating war, an instrumentality of war, or an injury for which you received a Purple Heart.8Office of the Law Revision Counsel. 10 USC 1413a – Combat-Related Special Compensation
The main differences:
- CRDP applies to all service-connected disabilities; CRSC requires a combat-related origin.
- CRDP requires a combined VA rating of 50 percent or higher; CRSC has no minimum combined rating, but you must have some combat-related percentage.
- CRDP is automatic; CRSC requires you to submit DD Form 2860 to your branch of service with supporting documentation.9Defense Finance and Accounting Service. Apply for CRSC
- CRDP is taxable, because the statute treats it as restored retired pay; CRSC is tax-free.10Department of Defense. Combat-Related Special Compensation Guidance
- A Chapter 61 retiree medically separated with fewer than 20 years cannot get CRDP but may qualify for CRSC if the disability is combat-related.
You cannot receive both at once.11Defense Finance and Accounting Service. CRDP-CRSC FAQs If you qualify for both, DFAS defaults you into whichever pays more on paper, but that comparison does not account for the tax difference. A retiree whose CRSC amount is somewhat lower than the CRDP amount can still come out ahead after federal and state taxes, because CRSC stays tax-free. Running the numbers against your actual bracket matters.
The Annual Open Season to Switch
Dual-eligible retirees get one chance a year to change their election. The 2026 open season runs January 1 through January 31, 2026.12Defense Finance and Accounting Service. DFAS Retiree Newsletter December 2025 DFAS mails a letter with instructions. To change your election, return the form with the “change my entitlement” box checked, postmarked by January 31. Returning the form without checking the box results in no change. Outside the window, DFAS will not process election changes.
How Taxes Work on Each Stream
Your VA disability compensation is tax-free, regardless of the amount. CRDP is taxable income subject to federal withholding, because it is restored military retired pay. DFAS applies withholding based on your W-4 elections on the retired pay side; the VA pays disability compensation separately with no withholding.
This split is precisely why the CRDP-versus-CRSC choice carries weight. Choose CRSC and the concurrent receipt amount is entirely tax-free under 10 U.S.C. § 1413a(g).13Office of the Law Revision Counsel. 10 USC 1413a – Section (g) Status of Payments Choose CRDP and you owe taxes on the restored amount. A retiree in the 22 percent federal bracket receiving $1,500 a month in CRDP keeps roughly $1,170 after federal taxes; the same $1,500 as CRSC stays at $1,500. The break-even point shifts with total income, filing status, and state tax rules.
How Concurrent Receipt Affects Divorce
Under the Uniformed Services Former Spouses’ Protection Act, state courts can divide “disposable retired pay” as marital property.14Office of the Law Revision Counsel. 10 USC 1408 – Payment of Retired or Retainer Pay in Compliance With Court Orders Disposable retired pay excludes amounts waived to receive VA compensation. CRDP restores the waived pay back into retired pay, and once restored it becomes part of disposable retired pay again. Electing CRDP can therefore increase the monthly amount payable to a former spouse under an existing court order.
CRSC is different. The statute states CRSC is not retired pay, so it falls outside what state courts can divide under the USFSPA.13Office of the Law Revision Counsel. 10 USC 1413a – Section (g) Status of Payments A retiree with a former-spouse obligation who elects CRSC instead of CRDP may reduce the amount subject to that share. If a court order is in play, a family law attorney experienced in military cases should review the numbers before any election change.
What Happens at Death
CRDP stops when the retiree dies, because it is a component of retired pay and retired pay ends at death. A surviving spouse does not inherit CRDP. Two separate survivor programs may provide continuing income: the Survivor Benefit Plan (SBP), which pays an eligible beneficiary up to 55 percent of the retiree’s retired pay, and Dependency and Indemnity Compensation (DIC) from the VA when the death is service-connected. As of January 2023, the old SBP-DIC offset has been eliminated, and surviving spouses receive both payments in full.15Defense Finance and Accounting Service. Congress Enacted Changes to the Survivor Benefit Plan
SBP premiums and the eventual annuity are calculated against the retiree’s full retired pay, which includes any CRDP-restored amount. Anyone weighing SBP enrollment or coverage levels should base the decision on the restored pay figure rather than the reduced number they saw before CRDP.