CRDP: Getting Both Retired Pay and VA Disability Pay

Concurrent Retirement and Disability Pay restores the retired pay military retirees waive to receive VA compensation. Here is the 50% threshold, the Chapter 61 rules, and how CRDP compares to CRSC.

Military retirees generally cannot collect full military retired pay and VA disability compensation at the same time. To receive VA compensation, which is tax-free, a retiree waives an equal amount of taxable retired pay — dollar for dollar. Concurrent Retirement and Disability Pay is the exception that gives most career retirees both in full.

Here is who qualifies, why you do not have to apply, and how it stacks up against the combat-related alternative.

The VA waiver CRDP undoes

The waiver is the starting point. For decades, a retiree receiving VA compensation gave up an equal amount of retired pay to get it. The trade was usually worth taking, because VA compensation is not taxed and retired pay is — but a disabled retiree effectively financed their own VA benefit out of the pension they had already earned.

CRDP restores that waived retired pay for eligible retirees. It began January 1, 2004 with a ten-year phase-in and reached full concurrent receipt for eligible retirees on January 1, 2014. Today, if you qualify, you receive both payments in full.

Who qualifies

Two conditions, both required. You must be entitled for the month to both military retired pay and VA disability compensation. And you must have a service-connected disability, or combination of disabilities, rated at least 50% disabling by the VA.

That 50% floor is the line that decides most cases. A retiree at 40% waives retired pay dollar for dollar; a retiree at 50% does not.

Reserve and Guard retirees qualify on the same terms once they are entitled to retired pay. For a Reserve member retired for disability before reaching retirement eligibility age, concurrent payment cannot start until they reach the age they otherwise would have had to reach.

The Chapter 61 rules

Retirees medically retired under Chapter 61 face two additional rules, and they are frequently described wrong.

A Chapter 61 retiree with fewer than 20 years of creditable service is not eligible for concurrent receipt at all. A Chapter 61 retiree with 20 or more years of creditable service is eligible, but the amount payable concurrently may be limited to what they would have received under a hypothetical longevity retirement — years of service times the multiplier — rather than the full disability retired pay.

Neither of those is a leftover from the phase-in. The phase-in ended December 31, 2013 and applies to no one now; the Chapter 61 rules are permanent features of the statute.

You do not have to apply

CRDP is automatic. The VA shares your disability rating with the Defense Finance and Accounting Service, and DFAS calculates and starts the payment on the regular monthly schedule without a separate application.

If your rating later rises to 50% or higher, DFAS audits your pay account and may owe you retroactive concurrent pay — potentially back to January 1, 2004, depending on your retirement date and when your rating reached the threshold. If you believe you qualify and are not receiving it, you can submit a written claim to DFAS using DD Form 827.

CRDP vs. CRSC

Two forms of concurrent receipt exist, and you cannot collect both at once.

CRSC covers disabilities your branch determines are combat-related — tied to armed conflict, hazardous duty, an instrumentality of war, simulated war, or a Purple Heart injury. The application goes to your branch of service, not to DFAS: Army through Human Resources Command, Navy and Marine Corps through the Council of Review Boards, Air Force and Space Force through the Air Force Personnel Center, and Coast Guard through its own process.

Two differences do the real work in comparing them. CRSC is tax-free and CRDP is not, so a dollar of CRSC is worth more than a dollar of CRDP at any tax rate above zero. But CRSC only covers the combat-related share of your disabilities, so a retiree with a 70% rating built mostly from non-combat conditions may see a much larger gross figure under CRDP.

Choosing between them

When you first become entitled to both, DFAS automatically applies the one that pays more based on the gross amount of each, then sends you an election form. If you want the other one instead, you return the form within 45 days.

After that first year, the comparison is yours to run. There is an annual Open Season each January — the 2026 window ran January 1 through January 31 — during which you can switch. If you do nothing, DFAS treats it as a passive election and keeps paying you under the same program until the next Open Season. DFAS does not re-run the comparison for you each year, which matters because the answer can change when your rating changes or your tax situation does.

For a retiree with combat-related conditions, running that comparison once a year is worth the twenty minutes.

Taxes

CRDP is restored military retired pay, so it is taxable at your existing retired pay federal income tax withholding rate. CRSC is not taxable. The VA compensation itself is tax-free under either program.

This is why the gross comparison DFAS runs is not always the right answer for a specific household. A CRSC amount somewhat smaller than the CRDP amount can still be worth more after tax. If the two figures are close, run the after-tax math before the January Open Season closes.

What CRDP is not

A few things get attached to CRDP that do not belong to it.

It is not a VA benefit. CRDP is paid by DFAS out of the military retirement system; the VA's only role is telling DFAS what your rating is. Questions about the amount go to DFAS, not to the VA or your VSO.

It does not increase your VA compensation. Your VA payment is whatever your rating entitles you to; CRDP restores the retired pay you were waiving to receive it. Two separate payments, from two separate agencies.

It has nothing to do with VA pension, which is a needs-based benefit with its own rules, and it does not apply to veterans who never earned military retired pay. A veteran who separated at ten years with a 70% rating has no retired pay to restore, so there is nothing for CRDP to do.

And it is not the same as the old phase-in. The graduated restoration that ran from 2004 through 2013 is finished. If you qualify today, you receive the full amount.

The bottom line

If you are a military retiree with a VA rating of 50% or higher, CRDP almost certainly restores your full retired pay on top of your VA compensation, automatically, with nothing to file. If you were medically retired under Chapter 61, check your creditable service — under 20 years there is no CRDP, and CRSC becomes the path worth pursuing. And if any of your disabilities are combat-related, compare CRDP against CRSC on an after-tax basis, then use the January Open Season if the answer has changed.

Frequently Asked Questions

Who qualifies for CRDP?

You must be entitled for the month to both military retired pay and VA disability compensation, and have a VA service-connected rating of at least 50%. That covers most 20-year and longevity retirees, including Reserve and Guard retirees once they are entitled to retired pay. Retirees medically retired under Chapter 61 need 20 or more years of creditable service to qualify at all.

Do I have to apply for CRDP?

No. CRDP is automatic — the VA sends your rating to DFAS, and DFAS calculates and pays it on the regular monthly schedule. If you believe you qualify but are not receiving it, you can submit a written claim to DFAS on DD Form 827.

Is CRDP taxable?

Yes. CRDP restores military retired pay, which is taxable at your existing retired pay withholding rate. That is the key difference from Combat-Related Special Compensation, which is tax-free. Your VA disability compensation remains tax-free under either program.

What is the difference between CRDP and CRSC?

CRDP covers all service-connected disabilities, requires a VA rating of at least 50%, is automatic, and is taxable. CRSC covers only disabilities your branch determines are combat-related, requires a VA rating of at least 10%, must be applied for with DD Form 2860 through your branch of service, and is tax-free. You cannot receive both at once.

How do I switch between CRDP and CRSC?

DFAS automatically pays whichever is greater by gross amount when you first become entitled to both, and sends an election form you can return within 45 days to choose the other. After that, you switch during the annual Open Season each January — the 2026 window ran January 1 through 31. If you do nothing, DFAS treats it as a passive election and keeps you in the same program.

Can CRDP be paid retroactively?

It can. If your rating increased to 50% or higher after you retired, DFAS audits your pay account and may owe retroactive concurrent pay, potentially back to January 1, 2004, depending on your retirement date and when the rating reached the threshold.

Why can't Chapter 61 retirees with under 20 years get CRDP?

The statute requires 20 or more years of creditable service for a disability retiree to receive concurrent payment. Retirees medically retired under Chapter 61 with fewer than 20 years are not eligible for CRDP at any rating. Those with 20 or more years are eligible, but the concurrent amount may be limited to what a longevity retirement would have paid. CRSC remains available to Chapter 61 retirees who have combat-related disabilities.