How Much Is Combat-Related Special Compensation (CRSC)?

Combat-Related Special Compensation (CRSC) is an entitlement for military retirees with disabilities directly linked to combat service. This program restores retired pay that would otherwise be reduced due to receiving disability compensation from the Department of Veterans Affairs (VA). CRSC provides tax-free monthly payments to offset the financial impact of these service-connected disabilities.

Eligibility for Combat-Related Special Compensation

To qualify for Combat-Related Special Compensation, an individual must meet several criteria. The applicant must be in a retired pay status and entitled to, or currently receiving, military retired pay. This includes those with 20 or more years of service, medical retirees, and those on the Temporary Disability Retired List (TDRL) or Permanent Disability Retired List (PDRL).

Another criterion involves having a Department of Veterans Affairs disability rating of at least 10% for combat-related conditions. While a VA disability rating signifies a service-connected condition, for CRSC, the disability must specifically be determined as combat-related by the service branch from which the individual retired.

A disability is considered combat-related if it was incurred as a direct result of armed conflict, hazardous duty, conditions simulating war, or through an instrumentality of war. Examples include injuries from direct combat, those sustained during hazardous activities like demolition, or injuries from training scenarios that simulate war. Disabilities for which a Purple Heart was awarded are automatically considered combat-related.

Finally, individuals must waive their retired pay to receive VA disability compensation. Military retired pay is offset, dollar for dollar, by the amount of VA disability compensation received. CRSC then restores some or all of this waived amount, allowing eligible veterans to receive both benefits concurrently.

Calculating Your Combat-Related Special Compensation

The calculation of Combat-Related Special Compensation restores military retired pay offset by VA disability compensation for combat-related conditions. The CRSC payment is generally the lesser of the amount of retired pay offset by VA disability or the amount of VA disability compensation directly linked to combat-related injuries.

Two primary factors determine the CRSC amount: the total military retired pay waived due to VA disability compensation and the percentage of that VA disability compensation determined to be combat-related by the service branch. The final CRSC amount cannot exceed the individual’s full retired pay entitlement.

Consider an example: a retired veteran receives $2,000 in monthly military retired pay and $1,800 in VA disability compensation. Due to the VA offset, their retired pay is reduced to $200, as $1,800 is waived. If the service branch determines that 75% of the veteran’s VA disability, or $1,350, is combat-related, the CRSC payment would be $1,350. The veteran would then receive their $200 in reduced retired pay, $1,800 in VA disability, and an additional $1,350 in CRSC.

In another scenario, if a veteran’s entire retired pay of $2,500 is offset by their VA disability compensation of $3,000, and only $1,000 of their VA disability is determined to be combat-related, the CRSC payment would be limited to $1,000. Even if more retired pay was waived, the CRSC amount cannot exceed the combat-related portion of the VA disability compensation.

Understanding the Financial Impact of CRSC

Receiving Combat-Related Special Compensation provides an additional, distinct payment. Veterans who receive CRSC typically receive three separate payments: their military retired pay (which reflects the VA waiver), their full VA disability compensation, and the separate CRSC payment.

CRSC payments are non-taxable. They are exempt from federal income tax under Title 26, United States Code. This tax-free status means the entire CRSC amount received directly benefits the veteran.

When considering the Survivor Benefit Plan (SBP), CRSC payments interact differently than regular retired pay. CRSC is not considered retired pay for SBP purposes. However, if a retiree’s regular retired pay is insufficient to cover SBP premiums, those premiums may be deducted from CRSC payments. For surviving spouses, the benefit typically ends upon the death of the service member.

The CRSC Application Process

Applying for Combat-Related Special Compensation involves a structured process. The primary form used for this claim is the DD Form 2860, “Claim for Combat-Related Special Compensation (CRSC).” This form can be obtained from the websites of the respective military service branches.

Gather all necessary supporting documents. This includes your DD Form 214 or DD Form 215, VA rating decisions, and relevant VA medical records that detail the causation of your disability. Medical records and other official service records that demonstrate the combat-related nature of the injury are also important.

Complete the DD Form 2860 accurately, providing personal information, service details, and clearly identifying the VA service-connected disabilities believed to be combat-related. Provide specific diagnostic codes for each disability as assigned by the VA. Submit the application package to the designated office of the military department from which the individual retired.

After submission, the processing timeline for CRSC applications can vary. Service branches generally aim to process applications within 120 business days. The Defense Finance and Accounting Service (DFAS) typically processes the first monthly payment within 30 to 45 days of receiving the approval letter from the service branch. Applicants will be notified of the decision by mail.