CRSC: Combat-Related Special Compensation Explained

For most of military retirement history, veterans with VA disability ratings had their retirement pay reduced dollar-for-dollar by their VA compensation, a policy called the VA offset. Two programs eliminated this offset for qualifying retirees: CRSC (Combat-Related Special Compensation) and CRDP (Concurrent Retirement and Disability Pay). This guide covers CRSC.

What CRSC Is

Combat-Related Special Compensation (CRSC) is a Department of Defense program that allows military retirees with combat-related disabilities to receive both military retirement pay AND VA disability compensation without the traditional offset, provided their disability meets CRSC's combat-related standard.

CRSC is paid by DFAS as a separate monthly payment. It's not an increase in VA compensation; it's a restoration of retirement pay that would otherwise be waived to receive VA benefits.

Who Qualifies for CRSC

To receive CRSC, you must meet all of the following:

1. Military retiree, regular retirement (20+ years), PDRL/TDRL disability retirement, or Reserve retirement with pay
2. VA disability rating, must have a combined VA rating of at least 10% for the combat-related conditions
3. Combat-related disability, the VA-rated condition must be connected to one of four categories. They come from 10 U.S.C. 1413a(e), and DoD defines them in the Financial Management Regulation, Volume 7B, Chapter 63:
   • A direct result of armed conflict. War, expedition, occupation of an area, battle, skirmish, raid, invasion, rebellion, insurrection, guerilla action or riot, and any action against a hostile force or terrorists. It also reaches injuries incurred as a prisoner of war or while escaping.
   • Hazardous service. Aerial flight, parachute duty, demolition duty, experimental stress duty and diving duty, among others. Travel to and from that service does not count, and neither do actions incidental to normal duty.
   • An instrumentality of war. A vehicle, vessel or device designed primarily for military service, or one whose use exposed you to a hazard peculiar to military service.
   • Conditions simulating war. Military training. This is the category most retirees overlook, and it is broader than the name suggests.

What "conditions simulating war" actually covers

The regulation is worth quoting, because people assume it means combat and stop reading. It covers disabilities resulting from military training "such as war games, practice alerts, tactical exercises, airborne operations, leadership reaction courses, grenade and live fire weapon practice, bayonet training, hand-to-hand combat training, repelling, and negotiation of combat confidence and obstacle courses."

That list is illustrative, not exhaustive. A shipboard general quarters drill is a practice alert. A damage control or firefighting evolution is a tactical exercise. You do not have to have deployed, and you do not have to have been shot at.

But read the next sentence. The regulation says it "does not include physical training activities such as calisthenics, jogging, formation running, or supervised sport activities." An injury from the PT test, a command run or an intramural game is excluded by name, however clearly the service caused it. The same goes for ordinary wear from routine duty that was not a training evolution.

The causal link is separate from the category

Fitting a category is not enough on its own. Every category requires a definite causal relationship between the event and the disability, and the regulation illustrates it bluntly. If you were playing a sport during a field exercise, fell and struck an armored vehicle, the injury is not an instrumentality-of-war injury, because the sport caused it. If the armored vehicle struck you, it is.

The combat-related standard is the key distinction between CRSC and CRDP. Conditions connected to service but not combat-related (e.g., a back injury from heavy lifting on base, hearing loss from mechanical maintenance) generally do not qualify for CRSC.

What CRSC Pays

CRSC is calculated based on your VA disability percentage for the approved combat-related conditions, not your full VA rating if you have non-combat conditions as well.

CRSC monthly payment = VA disability rate for combat-related conditions only

That amount is then capped. CRSC may not exceed the current reduction in your retired pay caused by the VA waiver under 38 U.S.C. 5304 and 5305, so you receive the lesser of the combat-related VA rate and the retired pay you actually gave up. If your retired pay is not being reduced at all, no CRSC is payable, which is why a Reserve retiree who has not yet reached retirement age cannot draw it.

The gross amount uses the same dependent rates the VA uses. If the VA pays you at the 100% rate for a veteran with a spouse and one child and your combat-related percentage is 60%, gross CRSC is the 60% rate for a veteran with a spouse and one child.

CRSC is not subject to federal income tax, which is a significant benefit.

Example:

• A retiree with $2,400/month gross retirement pay
• 70% total VA rating (50% combat-related PTSD, 20% hearing loss from maintenance, not combat-related)
• CRSC pays based on the 50% combat-related rating, not the 70% total
• CRSC payment ≈ $1,132.90/month (50% VA rate), capped at the retired pay waived

CRSC vs CRDP

If you don't meet CRSC's combat-related standard but have a 50%+ VA rating, you may qualify for CRDP instead. You cannot receive both simultaneously, if you'd qualify for both, DFAS will pay whichever is greater.

Chapter 61 Retirees and CRSC

Chapter 61 is the disability retirement chapter of Title 10. It is defined by why you were retired, not by how long you served: you can be retired under Chapter 61 with six years or with twenty-two. That distinction matters here, because the cap is different for each case, and both are set by 10 U.S.C. 1413a(b)(3).

Since 1 January 2013 the rule has been a ceiling on the combined payment rather than a choice between two figures. Your CRSC, added to whatever retired pay survives the VA offset, may not exceed:

The second row is the one that gets misstated, including in places that should know better. The comparison is to the longevity value of the years you actually served, not to a hypothetical 20-year retirement. A member retired under Chapter 61 after ten years is measured against roughly 25% of their retired pay base, not 50%. Reserve component service is counted under 10 U.S.C. 12733.

Two things follow from this. A Chapter 61 retiree whose disability percentage produced more retired pay than their years of service would have is giving some of that advantage back through this cap. And a TERA retiree is not caught by it at all: TERA retirees are entitled to CRSC and are explicitly exempt from the under-20 Chapter 61 reduction.

What Your Branch Has to See

Meeting a category is not the same as proving it, and this is where most denials come from. The regulation puts the burden squarely on you:

"The burden of proof that a disability is combat-related rests with the applicant, who is required to provide copies of documents in his or her possession to the best of his or her ability."

Decisions are made on "the preponderance of available documentary information where quality of information is more important than quantity," and on "credible, objective documentary information in the records as distinguished from personal opinion, speculation, or conjecture." The regulation adds that "an uncorroborated statement in a record that a disability is combat-related will not, by itself, be considered determinative."

In practice that means finding the document written at the time. The sick call note from the night of the drill. The line of duty determination. The incident or mishap report. The plan of the day, exercise schedule or training record showing what was happening when you were hurt. A clear memory of the event will not carry the claim; the contemporaneous record will, and it is the single thing most worth digging for before you file.

Your branch also records which of the four criteria qualified each condition, and it rules on each VA-rated condition separately. Having one approved condition says nothing about the next one.

How to Apply for CRSC

CRSC is not automatic. You must apply through your branch of service:

• Army: HRC (Human Resources Command) at https://www.hrc.army.mil/CRSC
• Navy/Marine Corps: Department of the Navy CRSC Board
• Air Force/Space Force: AFPC CRSC office
• Coast Guard: CG Personnel Service Center

Application requires:

• DD Form 2860 (CRSC application)
• VA rating decision letters for the conditions you're claiming as combat-related
• Service records documenting the combat-related incident (combat deployment orders, award citations, medical records from the incident)
• DD-214

The branch reviews your claim and determines which conditions meet the combat-related standard. VA ratings for these conditions then determine the payment amount.

Processing Time

Expect 3–6 months for initial CRSC decisions. Claims requiring additional documentation take longer. Decisions can be appealed through the branch-level process if denied.

CRSC pays retroactively to your date of eligibility under the CRSC statute. In Soto v. United States (2025), the Supreme Court unanimously struck down the old six-year cap on CRSC back pay, so retroactive amounts can reach back to when you first met the program's requirements (no earlier than its 2003 start). Keep documentation from your original claim submission to support the earliest possible date.

Tax Advantage of CRSC

Unlike CRDP (which is taxable retirement pay), CRSC is treated as disability compensation and is exempt from federal income tax under 26 U.S.C. § 104. For retirees in higher tax brackets, this distinction can make CRSC worth substantially more than CRDP even at comparable dollar amounts.

If you're in the 22% bracket and CRSC pays $1,100/month tax-free, that's equivalent to $1,410/month of taxable income. Run the comparison before assuming CRDP is better.

Frequently Asked Questions

Can I get both CRSC and CRDP at the same time?

No. You cannot receive CRSC and CRDP simultaneously. If you qualify for both, DFAS pays whichever you have elected, and you get one opportunity each year to reverse that election during the annual open season, normally 1 to 31 January. DFAS sends an annual notice showing what you would receive under each program. If you make no change, your current election simply continues.

Is CRSC taxable?

No. CRSC is treated as disability compensation and is exempt from federal income tax under 26 U.S.C. § 104. This is a key advantage over CRDP, which is taxable retirement pay.

What counts as a combat-related disability for CRSC?

A VA-rated condition qualifies if it is connected to armed conflict, hazardous service (such as parachuting, flight duty, demolition or diving), an instrumentality of war (a vehicle, vessel or device designed primarily for military service), or conditions simulating war, which means military training such as war games, practice alerts and tactical exercises. Physical training is specifically excluded: the regulation says the training category "does not include physical training activities such as calisthenics, jogging, formation running, or supervised sport activities." Conditions connected to service but not to one of the four categories, like a back injury from routine lifting on base, generally do not qualify.

Do injuries from drills and training count for CRSC?

Often, yes. Conditions simulating war is one of the four qualifying categories, and the regulation's examples include war games, practice alerts and tactical exercises, so a shipboard general quarters drill or a damage control and firefighting evolution fits the named examples without any deployment. Two limits apply. Physical training is excluded by name, so calisthenics, jogging, formation running and supervised sports do not count. And you need a definite causal link documented at the time, not just the fact that you were injured at some point during your service. Go looking for the sick call entry, line of duty determination or mishap report from that day.

How long does CRSC take to process?

Expect roughly 3 to 6 months for an initial CRSC decision, longer if additional documentation is required. If denied, you can appeal through your branch's process.

Does CRSC pay retroactively?

Yes. CRSC pays retroactively to your date of eligibility under the statute. The 2025 Supreme Court decision in Soto v. United States removed the previous six-year limit on CRSC back pay, so retroactive amounts can reach back to when you first qualified (no earlier than the program's 2003 start). Keep your original submission documentation.

Can Chapter 61 medical retirees get CRSC?

Yes, at any length of service. Chapter 61 is the disability retirement chapter, not a length-of-service category, so it covers both a member retired after six years and one retired after twenty-two. Eligibility for those under 20 years was added by the 2008 National Defense Authorization Act. Either way you must still show a VA-rated condition is combat-related, and a cap applies: with 20 or more years, CRSC plus any remaining retired pay cannot exceed the longevity retirement you would otherwise have drawn; with fewer than 20, the ceiling is your retired pay percentage under 10 U.S.C. 1409(b) times your actual years of creditable service, times your retired pay base.

Can I get CRSC with less than 20 years of service?

Yes, but only if you were medically retired under Chapter 61 or retired under the Temporary Early Retirement Authority (TERA). Regular retirees always have at least 20 years, so the under-20 question applies only to disability and early retirees, and for them CRSC is subject to a cap tied to years of service. This is the opposite of CRDP, which is never available to Chapter 61 retirees with fewer than 20 years.

How is the CRSC amount calculated?

CRSC is based on the VA compensation rate for your combat-related disabilities only, not your total VA rating. Your branch assigns a combat-related percentage, and DFAS pays the corresponding dollar amount from the VA compensation tables (including any dependents), capped so it does not exceed the retired pay you waived to receive VA compensation. If only some of your conditions are combat-related, CRSC pays on that lower combat-related percentage rather than your full combined rating.

Does CRSC reduce my VA disability compensation?

No. CRSC does not touch your VA disability compensation, which continues in full. CRSC is a separate, tax-free payment from DFAS that restores retired pay you previously waived, so it is added on top of your VA compensation rather than taken from it.

How do I apply for CRSC and who do I send DD Form 2860 to?

You apply by submitting DD Form 2860 to your branch of service, not to the VA and not to DFAS. Army applications go to Human Resources Command, Air Force and Space Force to the Air Force Personnel Center, Navy and Marine Corps to their respective boards, and Coast Guard to the Personnel Service Center. Include your VA rating decision letters and service records documenting the combat-related event; the branch decides which conditions qualify, then DFAS calculates and pays the benefit.

Do I need a Purple Heart to qualify for CRSC?

No. A Purple Heart is not required for CRSC, though it is strong evidence that a condition is combat-related and can speed approval. You can also qualify through disabilities tied to armed conflict, hazardous service, an instrumentality of war, or conditions simulating war such as combat training, none of which require a Purple Heart.

Should I choose CRSC or CRDP if I qualify for both?

You cannot receive both, so compare the after-tax value. CRDP restores your full retired pay but is taxable, while CRSC covers only combat-related conditions but is tax-free, so a smaller CRSC payment can be worth more than a larger CRDP payment after taxes. DFAS pays whichever you elect and lets you switch during the annual open season, so run both numbers against your tax bracket before deciding.

How far back does CRSC back pay go?

CRSC back pay now runs to your actual date of eligibility rather than the old six-year limit. In Soto v. United States (2025), the Supreme Court ruled unanimously that the Barring Act's six-year cap does not apply to CRSC, and 2026 DoD guidance directed the services to use the eligibility date set by the CRSC statute. The program authorizes retroactive pay no earlier than its 2003 start, so keep your original claim documentation to support the earliest possible date.

Project your pension: Use the free military retirement calculator to estimate your retired pay.

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Sources: 10 U.S.C. § 1413a — Combat-Related Special Compensation (GPO text), DoD 7000.14-R, Financial Management Regulation, Volume 7B, Chapter 63, "Combat-Related Special Compensation" (June 2024 version), which supplies the combat-related definitions, the burden of proof and the Chapter 61 caps quoted above, 26 U.S.C. § 104 — exclusion for disability compensation, DFAS — Retired Military disability pay (CRSC/CRDP), VA 2026 disability compensation rates. Figures reflect 2026 VA rates; confirm against the official source before acting. This is general information, not financial, tax, or legal advice.