If you are a military retiree with a VA disability rating, federal law will not let you collect both your full retired pay and your full VA compensation. You waive a dollar of taxable retired pay for every dollar of tax-free VA compensation. That is the VA waiver, sometimes called the offset, and it is the reason two acronyms exist.
Most explanations of CRDP and CRSC stop at "one is taxable, one is not." That is true and it is not the useful part. The useful part is that DFAS defaults you to whichever entitlement is larger in gross dollars, and gross dollars is the wrong unit to decide this in.
They do fundamentally different things
People treat these as two flavors of the same benefit. They are not. One eliminates the waiver. The other leaves the waiver in place and hands you a separate check.
| CRDP | CRSC | |
|---|---|---|
| What it does | Eliminates the VA waiver and restores your retired pay | Leaves the waiver in place. Your branch reimburses the combat-related share separately |
| Taxable | Yes. It is retired pay | No. It is special compensation, not retired pay |
| Application | None. Automatic | Required. DD Form 2860, to your branch |
| Rating needed | Combined 50% or higher | 10% or higher, on the combat-related conditions |
| Service needed | 20+ years of qualifying service | Retired and receiving retired pay |
| Who decides | DFAS, from your VA rating | Your branch's CRSC board, not DFAS |
| Checks per month | One from DFAS | Two from DFAS, plus your VA payment |
That last row is where the confusion lives. Under CRSC your retired pay is still offset by the full amount of your VA compensation. DFAS uses this example: on $1,000 of gross retired pay with $450 of VA pay, your net taxable retired pay is $550. Add a $250 tax-free CRSC payment and DFAS sends you $800 across two checks. The waiver never went away. CRSC just gave part of it back, tax free, because part of your disability was combat-related.
The default is gross, and gross is the wrong unit
When you first become eligible for both, DFAS pays the larger entitlement. That comparison is in gross dollars. But CRDP is taxable and CRSC is not, so a smaller CRSC award can beat a larger CRDP award on the only number that reaches your bank account.
Work it in the other direction and the size of the gap becomes obvious. In the 22% bracket, a CRDP payment has to be about 28% larger than a CRSC payment just to tie it after federal tax, before any state tax. If your state taxes military retired pay, the required gap grows again.
And CRSC has a real ceiling that CRDP does not. CRSC only reimburses the share of the waiver attributable to disabilities your branch has ruled combat-related. If you carry an 80% combined rating and your board approves only the 40% that came from the blast, CRSC pays against that 40%. CRDP restores the whole waiver. A retiree with mostly non-combat conditions can find CRDP much larger, and the tax difference never closes the gap.
The Chapter 61 rule that half the internet gets wrong
Search this topic and you will find sites, including some that look authoritative, saying Chapter 61 medical retirees qualify for CRDP. Read the statute. Title 10, section 1414 says the concurrent receipt provision does not apply to a member retired under Chapter 61 with less than 20 years of creditable service.
If you were medically retired with fewer than 20 years, you are not eligible for CRDP. Full stop. Your retired pay stays offset. Roughly nine in ten Chapter 61 retirees are in exactly that position, and it is often the entire DoD retirement of a junior enlisted soldier being erased.
What those retirees can pursue is CRSC, if a disability is combat-related, subject to a longevity cap: the benefit is limited by what you would have earned on a pure longevity retirement, which is years of service times 2.5% times your High-3. Our Retirement Income Summary models this offset directly rather than assuming it away.
Four traps DFAS warns about and nobody reads
These come straight from the DFAS open season FAQ. They are the practical consequences of switching to CRSC, and they surprise people every January.
- Allotments cannot come out of CRSC. If the VA waiver eats your retired pay, there is nothing left for allotments to deduct from. Allotments for things like TRICARE or dental can stop, and you will have to pay those agencies directly to keep the coverage. Nobody calls to tell you.
- SBP premiums will come out of CRSC. If there is not enough retired pay to cover your Survivor Benefit Plan premium, DFAS deducts it from the CRSC payment instead. Your beneficiaries stay covered. See the SBP Calculator for what that premium is buying.
- A former spouse's share can shrink or stop. CRSC is not subject to the Uniformed Services Former Spouses' Protection Act, because it is not retired pay. Switching to CRSC can reduce or end a former spouse's court-ordered portion. CRSC does remain subject to garnishment for alimony and child support. If a divorce decree is involved, talk to a lawyer before you elect. We are not lawyers and this is not legal advice.
- A CRSC increase is not automatic. If the VA awards you new service-connected conditions, your CRSC does not rise on its own. You have to file a reconsideration claim with your branch, because your branch decides what is combat-related, not DFAS. People wait years for an increase that was never coming.
Open season, and the election you make by doing nothing
If you are eligible for both, DFAS mails an open season letter showing both entitlement amounts. The election window runs January 1 through January 31, and a change request has to be postmarked by the deadline.
If you do not return the form, DFAS treats that as a passive election and keeps paying you under the same program. Doing nothing is a decision. And once the window closes you cannot switch until the next January, even if your entitlements change mid-year. Verify the mailing address on your retired pay account in early December, because the letter is time sensitive and it is the only year's notice you get.
The Part That Actually Costs People Money
CRDP arrives on its own. Nobody has to know it exists. CRSC does not. It requires a DD Form 2860, a documented link between a specific event and a rated condition, and a board at your branch that says yes. Every year, retirees who would qualify never apply, because the benefit that shows up automatically feels like the benefit that exists.
If any part of your rating traces to armed conflict, hazardous duty, an instrumentality of war, or training that simulated war, the application costs you paperwork and nothing else. You cannot lose CRDP by applying for CRSC. DFAS will simply compare them. The worst outcome is that you learn CRDP was already the better deal.
The Major Richard Star Act, as of this writing
The Star Act would end the offset for Chapter 61 retirees with combat-related disabilities and fewer than 20 years of service. It has not passed. As of early July 2026, the House bill (H.R. 2102) carried 334 cosponsors and the Senate companion (S. 1032) carried 79. A House discharge petition filed in May had 203 of the 218 signatures needed. Senate attempts to pass it by unanimous consent were blocked by objection, and the text was offered as an amendment to the FY2026 NDAA but did not make the final bill.
In June 2026 the text was folded into a larger Senate package (S. 4744) that pairs it with roughly $57 billion in offsets, achieved by tightening how the VA rates conditions such as sleep apnea and tinnitus. Supporters describe that as the price of finally moving a bill that has stalled for years. Several veterans service organizations, including DAV, oppose the offsets on the grounds that they fund one group of disabled veterans at the expense of another. Opponents of the underlying bill have called concurrent receipt a double benefit and pointed to a CBO cost estimate near $9.75 billion.
We are not going to tell you which side is right. What matters for planning is the status: as of July 2026 the law has not changed, the offset still applies, and the bill would not be retroactive if it passed. Legislation moves. Check the current status before you rely on any of this.
Frequently Asked Questions
Can I get both?
No. DFAS pays one. By default it pays the larger gross entitlement, and you can switch during the January open season.
Am I eligible for CRDP as a Chapter 61 retiree?
Not with fewer than 20 years of creditable service. Title 10, section 1414 excludes you by name. Sites that tell you otherwise are wrong. CRSC may still be available for combat-related conditions.
Is tax-free CRSC always better?
No. CRSC only covers the combat-related share of your waiver, so it is often smaller. And DFAS states that a retiree whose federal tax status is exempt receives the same amount either way.
Do these transfer to my survivor?
Neither CRDP nor CRSC continues after your death. Survivor income comes from the Survivor Benefit Plan and VA Dependency and Indemnity Compensation.
This is planning math, not legal or tax advice, and your branch and DFAS are authoritative on your own account. Related: the Retirement Income Summary, which models the offset and both restoration paths, the VA Disability Calculator for what a rating pays, and the VA Combined Ratings Calculator if you are still working out the rating itself.