Setting the Record Straight on CRSC and CRDP

Jan 14 2011

Published by at 1:47 pm under Military Benefits,VA Benefits

CRDP and CRSC are confusing programs. Our experience from talking regularly with uniformed members is that several misconceptions routinely pop up. We will address these common misconceptions.

But to start, a little history follows to help build a more complete understanding of the concurrent receipt programs. We take literary license with the legal references to provide a clearer illustration of how things work. This also puts the topics in the context of our discussions with service members.

Original ‘concurrent receipt’ law stipulated you cannot be paid twice for the same disability/service. This law still applies in some cases—more on this later. If you receive Service retired pay and VA comp, the VA comp is subtracted from your Service retired pay in the form of the ‘VA waiver.’ You ‘waive’ your Service retired pay to receive VA comp.

MOAA fought for legislation that would stop concurrent receipt laws from denying a Service member’s retired pay that was vested in their years of service. After all, you earned that pay through years service. VA comp should not be deducted from vested Service time since the VA pay is specifically designated as disability compensation. From this lobbying, new concurrent receipt legislation was passed and CRSC and CRDP were born. As the result, CRSC and CRDP restore the Service retired pay vested through years of service that VA comp denied you. This is a key point of concurrent receipt; concurrent receipt does not restore disability compensation from the Service. It restores longevity retired pay. Now we bust some misconceptions.

#1. There is a strong belief among people that CRSC is a new form of pay, a third paycheck if you will, above and beyond any Service retired pay and VA comp amounts. CRSC is a third form of pay but it is not an amount in addition to Service retired pay and VA disability compensation. While technically it comes to you as a third pay check, it is pay that restores your Service retired pay for all or part of the VA Waiver amount being deducted from Service pay. CRDP on the other hand is not a third form of pay. CRDP is the return of Service retired pay by decreasing the VA Waiver amount in your Service retired pay.

#2. CRSC is a “restoration” of Service retired pay. To “restore” Service retired pay implies two things. First, you were denied Service retired pay (through a VA Waiver) so it has to be “restored.” Second, the amount being restored can’t be greater than the original amount of Service retired pay denied. You can’t “restore” what was never denied in the first place. You can’t receive CRDP/CRSC retroactive pay unless you were denied Service retired pay in the past. This usually comes up as an issue when someone has been receiving CRDP for a time and later is awarded CRSC. If you were receiving CRDP, your retired pay was already being restored. The subsequent award of CRSC won’t get you back pay unless your CRSC amount restores more than you were already having restored in the past.

#3. Concurrent receipt restores Service retired pay so let’s carefully consider the phrase “Service retired pay” as it pertains to CRSC/CRDP. “Service retired pay” is pay that you earned through longevity; your time served. This is a big issue for members who were medically retired because you may have a Service retired pay amount that is more than the amount you earned based on your longevity.

Example: a person with a longevity retirement earns retired pay at:

  • Years served X 2.5% X your base pay at retirement or high-3.

However, you medically retired folks may have a Service disability rating (not your VA rating) that makes your retired pay at retirement greater than the amount of pay based on the longevity formula just explained. With 20 years of service, your longevity retired pay is 50% of base pay. But a medical retirement with a Service disability rating of 60% gets a 60% pay out for retirement even if the service time is 20 years. Everything above 50% is considered a form of disability pay.

So CRSC/CRDP restores ‘Service retired pay’ which is only the retired pay that’s based on longevity. All the Service retired pay you receive above the amount due to time served is considered disability pay, not ‘Service retired pay’ and Service disability pay is not restored by any form of concurrent receipt.

In other words, the original concurrent receipt laws that state you can’t be paid twice still apply when it comes to disability pays. If the VA pays you for your disabilities, you can’t receive Service disability pay at the same time.

#4. The CRSC Glitch. (UPDATE: THE GLITCH IS FIXED. THIS NO LONGER APPLIES) For you members medically retired with less than 20 years service, you have a different issue to contend with. First, your CRSC amount is limited to your longevity portion of your retired pay. For many of you, this longevity portion is a small amount when compared to your total Service check. Next, you are limited in the amount of CRSC pay you receive to the amount of CRSC pay that is above the amount you receive for the Service disability portion of your Service retried pay. Here’s an example:

  • Total Service retired pay (disability and longevity pay) $2000
  • Service portion based on longevity $500
  • Service portion based on disability $1500
  • CRSC pay you are entitled to $800
  • Actual CRSC pay (Entitled CRSC – Service disability) $0

This effect is known as the CRSC glitch. It’s a problem in how the CRSC law explains the pay formula, as shown above. Technically, everyone should get either all their entitled CRSC pay or CRSC up to the amount of Service retired pay based on their longevity. This is a problem MOAA is fighting to fix.

#5. Your CRSC check will equal your VA comp amount. Not necessarily so. VA comp is based on your total disabilities regardless of whether the disabilities were the result of combat. CRSC pays only the portion of your total disabilities that were directly related to combat. It is not unusual for a CRSC rating and the resulting payment to be smaller than the VA comp amount. This means you will continue to have a VA waiver amount in your Service retired pay.

#6. CRSC is always a better payment than CRDP. Not so. As stated in #5, CRSC is limited to combat injuries and as such that can be a significant limiting factor on the amount paid. CRDP is not limited to combat related disabilities so the amount is based on your total VA comp (plus the issue raised in #3). The combat related nature of CRSC is a basis behind its tax-free status while CRDP is taxable. Your CRDP amount may be larger to the point that even though it’s taxable, it still leaves more money in your pocket.

There may be times the amount of pay under CRDP is large enough that even after taxes it could be greater than a limited CRSC tax-free check. This is why your pay agency allows you a chance to select which version of pay you want during the ‘open season’ each December. As CRDP continues to phase-in over the years (until 2014), one year your CRDP amount may provide you the greatest take-home pay.

#7. “I get CRSC but a VA waiver is still deducted from my Service retired pay. Where is my concurrent receipt?” This misunderstanding is partially based in #1. Some folks think CRSC is a payment above and beyond all other pays. CRSC and CRDP are both forms of ‘concurrent receipt’ (used in the context of the phone calls). As such, a member can only receive one form of concurrent receipt or the other but not both simultaneously. The confusion seems to also originate in the manner in which the CRDP or CRSC is paid.

CRDP is paid by being reinserted back into your Service retired pay. You’ll note this in your Retiree Account Statement (pay stub) from your pay agency. With CRDP, your VA waiver disappears or gets smaller as CRDP is phased-in. Eventually, most of you will receive full Service retired pay and full VA comp (medically retired over 20 years of service may not see full Service retired pay). You won’t actually see a CRDP payment because the fact that you’ll receive full Service retired pay IS CRDP at work.

You CRSC folks receive a separate payment outside your Service retired pay and VA comp. CRSC is your form of concurrent receipt. Your Service retired pay stub will continue to indicate a full VA waiver amount as long as you receive CRSC.

I hope these explanations help clear the air on the major myths behind CRDP and CRSC. As other myths pop-up in future discussions, I’ll add to this post. Thank all of you for your service and sacrifices.

256 responses so far

256 Responses to “Setting the Record Straight on CRSC and CRDP”

  1. Daveon 26 Jan 2016 at 12:21 am

    I’m very confused w/ CRDP. I’m retired E8 w 24yrs of service and just received notice from VA of 100% disability rating. The VA payment form states I should receive $3198 per month, my dfas pay stub states that my Crdp amount is $2815 which is the exact amount of my retirement pay? I received back pay of $383 which is exact difference between $3198-$2815. I thought that I would receive 2 payments one from VA and one from DFAS both at full rate. Am I mis interpreting something?

  2. Shane Ostrom, CFP®on 26 Jan 2016 at 11:09 am

    Dave, CRDP ensures you get the retired you earned with your years of service. From this point forward, you will get all the VA compensation for a 100% rating plus you will get all your retired pay for your 24 years of service. In the ‘old days’ before CRDP, you have only received the VA comp and no retired pay. Without CRDP, the VA comp would wipe out your retired pay because the ‘VA Waiver’ (you waive your retired pay to receive VA comp) would have been applied to your retired pay. The VA Waiver normally equals your VA comp amount. Shane

  3. kevinon 29 Jan 2016 at 6:37 pm

    Hi Shane,
    I am a retired Marine (E-7) with 20 years of service who served in Iraq and Afghanistan. Today I received my VA Disability rating with an overall combined rating of 90% and I don’t know what to do next concerning the Combat Related Special Compensation (CRSC) and/or Concurrent Retired and Disability Pay (CRDP) programs. The VA just wrote “You may be eligible for full or partial concurrent receipt of VA compensation and military retirement pay under the CRSC and/or CRDP programs. Your retired pay center (RPC) has been notified of this award of VA compensation. If your RPC determines the withholdings from your VA compensation should be retroactively adjusted due to CRSC/CRDP eligibility; VA will modify and will adjust your VA compensation accordingly”.
    Now… Here are my questions:
    -Who is my retired pay center (RPC)? and
    -How will they know if my disability rating is based mostly due to combat related injuries?
    Any assistance or guidance with these matters are greatly appreciated.

  4. Shane Ostrom, CFP®on 01 Feb 2016 at 3:02 pm

    Kevin, if you are an active duty retiree with 20year of service or more, you will automatically receive CRDP. Your pay center is DFAS (www.dfas.mil). All this means is that you will not have your retired pay docked due to you accepting VA comp for a disability. If you didn’t get CRDP, your retired pay would be docked dollar for dollar by the amount of your VA comp.

    If you wish, you can apply for CRSC to your Service. Google CRSC and your Service. Web site has all the info and forms to apply to your Service. What CRSC means is that instead of CRDP above, you will have your retired pay docked dollar for dollar for the amount of your VA comp, and in return you will be reimbursed for the amount docked from your retired pay with a separte tax-free CRSC check.

    CRSC tax free. CRDP restored taxable retired pay. Both restore your retired pay that would normally be docked by the VA Waiver (the amount of your VA comp). Your Service determines your combat related status under CRSC. That’s why you apply. Shane

  5. Zacon 04 Feb 2016 at 3:49 pm

    I am a veteran of only seven years. On that seventh year, I was medically retired due to permanent combat related injuries. I did not want to retire. But, before I even departed from the hospital, my retirement paperwork was finalized. My VA rating is 100%. I receive a very very small amount of CRSC. Am I not entitled to any CRDP because I didn’t (couldn’t) do 20+ years? ….for the record; I am EXTREMELY grateful for what I get. Just curious if I’m missing something that I should know about. Thanks.

  6. Shane Ostrom, CFP®on 05 Feb 2016 at 12:44 pm

    Zac, if you are getting CRSC, that’s all there is pay-wise from the DOD given your years of service. Thank you for your service to our country…Shane

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