Congress enacted the Concurrent Retirement and Disability Pay Act (CRDP) in 2004. Veterans who qualify for the CRDP program are eligible to receive both their full DoD disability and retirement benefits as well as their full VA disability benefits.
To be eligible for the CRDP, you must meet one of the following criteria for retirement:
- Retiring because you are of retiring age;
- Reserve member retired after twenty years of service and reaching retirement age;
- Retiring under the Early Retirement Act;
- Retiring due to a service-related disability.
Disabled retirees may be eligible for CRDP, but only if they are otherwise eligible for retirement. The CRDP is not open to anyone who can retire because of a disability. The Veteran also needs to have at least a 50% service-connected disability rating.
What Forms Are Required for CRDP?
The nicest part of the CRDP is that it is automated if you meet the requirements. It does not need an application or a single action on your part.
Contact the Defense Financial and Accounting Service at 1-800-321-1080 if you are not getting your CRDP as expected.
Why Aren’t Disabled Veterans Getting a Full CRDP?
Veterans who retire with a service-disabled rating may not get the full waiver amount from the VA. Due to the fact that their in-service disability rating raises their retired pay, the CRDP can only cover the portion of their retired pay based solely on years of service. For these Veterans, DFAS will reinstate the VA waiver based on years of service, but not the VA waiver based on in-service disability rating.
CRDP for Medical Retirees and Reserves
Age 60 is the retirement age for medical and reserve members. They will be ineligible for CRDP until their retirement age.
However, Veterans who are medically retired before the age of 60, qualify for CRDP.
Is CRDP Taxable?
Military retirees who receive CRDP are subject to the same federal income tax withholding (FITW) rate as those who get regular retired pay. For further information or guidance on withholding in this situation, speak with a tax expert.
Are CRDP and CRSC the Same?
No. Combat Related Special Compensation (CRSC) is a program created by Congress to allow eligible persons the ability to receive compensation in addition to retired pay. It is not a typical VA benefit. It is also tax-free.
Combat Related Special Compensation can be applied for if you satisfy the requirements set out by the VA:
- Chapter 61 Medical Retirees, National Guard troops, and Reservists with 20 years of service;
- Ten percent or greater VA disability rating for combat-related VA disability;
- Purple Heart recipients.
Disabilities that are eligible for CRSC must have been caused directly or indirectly by service in a war. A portion of the CRSC budget is designated to cover military-related medical expenses.
Deciding Between CRDP and CRSC
CRDP and CRSC cannot be received at the same time. When faced with the choice between CRDP and CRSC, it might be difficult to make a selection. Most people who have served in the military simply accept the reward that provides the most money. You can do the same.
To determine which program pays you the most, DFAS looks at your current CRDP benefits and your CRSC eligibility (as determined by your branch of service). They will pay you the higher sum automatically. As noted, most Veterans will opt to continue receiving the higher-paying benefit, which necessitates no further effort on their part.
However, if you do wish to make a switch, you can do so during the open season. Once a year, DFAS will allow you to switch programs.
DFAS mails an open-season election letter to you each December. The letter outlines the many benefits you might obtain under the CRDP or CRSC program, as well as the potential tax implications of each. On the form enclosed with the letter, you'll be able to choose between the CRPD and CRSC. There is no need to complete the form if you wish to continue getting the benefit you presently receive.
If your VA or CRSC rating (i.e. the percentage of your disability that is deemed combat-related) changes in the middle of the year, having an open season switch may be very helpful. A change in rating (increase or reduction) may elevate one of the benefits over the other in terms of value.
How We Help Veterans
With the VA, filing a claim is often arduous and difficult. Veterans Disability Info if your VA claim for compensation has been denied. To avoid any unpleasant surprises, we'll help you analyze any VA denial and guide you with respect to possible appeal options. Reach out to us online or by phone at 888.878.9350 with any issues you may have. Our team would be more than willing to help out.