For many retired veterans, VA disability compensation comes with a frustrating trade-off: a reduction in military retirement pay. Combat Related Special Compensation (CRSC) was created to fix that problem for veterans whose disabilities are tied directly to combat or combat-like activities.
CRSC is not automatic. Veterans must apply through their branch of service and provide clear proof that their disabilities are combat-related. When approved, CRSC restores part or all of the retirement pay that was previously offset without creating a tax burden. This guide explains exactly how CRSC works, who qualifies, and how to apply correctly.
Introduction to Combat Related Special Compensation (CRSC)
CRSC is a special monthly payment designed for retired service members with combat-related disabilities. It allows veterans to receive both military retirement pay and VA disability compensation at the same time, without the normal offset.
The program is administered by each service branch, with payment coordination handled by the Defense Finance and Accounting Service.
“CRSC exists to recognize that combat injuries deserve compensation without financial penalty,” explains a retired military pay analyst.
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Key Features of CRSC
Below is a snapshot of how CRSC works.
| Feature | Details |
|---|---|
| Payment Type | Monthly, tax-free |
| Who Administers | Military service branches |
| Payment Processor | DFAS |
| Minimum VA Rating | 10% (combat-related) |
| Retirement Requirement | Yes |
| Can Be Retroactive | Yes (up to 6 years) |
| Tax Status | Non-taxable |
Basic Eligibility Requirements for CRSC
To qualify for CRSC, you must meet all three eligibility conditions.
Military Retirement Status
You must be a retired service member entitled to military retirement pay. This includes:
- 20+ years of active or reserve service
- Medical retirement under Chapter 61
- Temporary Early Retirement Authority (TERA) retirees
- Temporary or Permanent Disability Retired List (TDRL/PDRL)
Combat-Related VA Disability
You must have at least one VA-rated disability at 10% or higher that is officially classified as combat-related.
“Your VA Rating Code Sheet is one of the most important documents in a CRSC claim,” notes a veterans benefits consultant.
Retirement Pay Offset
CRSC is intended for retirees whose military retirement pay is reduced due to VA disability compensation. Veterans with a VA rating of 50% or higher may also qualify for CRDP, but must choose one program.
CRSC vs CRDP: Understanding the Difference
CRSC and CRDP are often confused, but they serve different purposes.
| Feature | CRSC | CRDP |
|---|---|---|
| Disability Type | Combat-related only | Any VA disability |
| Minimum VA Rating | 10% | 50% |
| Taxable | No | Yes |
| Application Required | Yes | No |
| Can Receive Both | No | No |
“Choosing between CRSC and CRDP should always involve a financial comparison,” advises a military retirement planner.
What Counts as a Combat-Related Disability?
CRSC requires proof that the disability occurred under qualifying circumstances.
Combat-related disabilities include conditions caused by:
- Armed conflict (direct or indirect)
- Hazardous duty (parachuting, demolitions, flight operations)
- War simulation activities (live-fire training)
- Instruments of war (weapons, military vehicles)
- Injuries resulting in a Purple Heart
Required Evidence and Documentation
Strong documentation is critical for approval.
Common Supporting Evidence
- Service medical records from time of injury
- After Action Reports and incident reports
- Award citations (Purple Heart, CAB, medals)
- Performance evaluations (NCOERs/OERs)
- VA Rating Decision and Code Sheet
- DD214 and retirement orders
“The clearer the link between injury and combat activity, the stronger the claim,” says a former CRSC reviewer.
How to Apply for CRSC: Step-by-Step
Applying for CRSC involves your service branch, not the VA.
Step 1: Complete DD Form 2860
This is the official CRSC application form. Complete it electronically if possible to avoid errors.
Step 2: Gather Supporting Evidence
Include only relevant documentation that supports the combat-related nature of your disability.
Step 3: Submit to Your Service Branch
Each branch reviews its own CRSC applications and forwards approved claims to DFAS.
Where to Submit Your CRSC Application?
Submit your application to your respective service branch.
CRSC Submission
| Branch | Submission Method |
|---|---|
| Army | Mail, Email, eFAX |
| Air Force / Space Force | Online portal or mail |
| Navy / Marine Corps | Mail or email |
| Coast Guard | Mail or email |
Always keep copies of everything submitted.
CRSC Processing Timeline and Back Pay Rules
CRSC claims typically take 120 days to process, but delays are common due to evidence review and DFAS coordination.
Six-Year Statute of Limitations
CRSC back pay is limited to six years from:
- VA compensation award date, or
- Retirement entitlement date
Filing early maximizes retroactive payments.
Retroactive CRSC Payments Explained
Approved veterans may receive back pay dating to:
- June 1, 2003 (standard cases)
- January 1, 2008 (medical retirees under 20 years)
DFAS calculates retroactive pay after service approval.
“Retroactive CRSC payments can be substantial, especially for long-delayed claims,” notes a DFAS pay specialist.
What Happens If You Miss the Deadline?
If you file after the six-year window:
- You may still receive CRSC moving forward
- Retroactive pay is capped at six years
Missing the deadline does not eliminate eligibility, only back pay.
Reconsideration and Appeals
You can request reconsideration if:
- Your claim is denied
- You receive a new combat-related VA rating
- Your existing rating increases
Reconsideration requests go directly to your service branch.
Is CRSC Pay Taxable?
No. CRSC payments are 100% tax-free, unlike CRDP.
This makes CRSC especially valuable for veterans with high combat-related ratings.
Why CRSC Matters for Retired Veterans?
CRSC restores financial fairness for veterans injured in combat. It ensures that disability compensation does not penalize retirement pay and recognizes the sacrifices made in hazardous service.
For many retirees, CRSC provides thousands of dollars per year in tax-free income.
FAQs
What is CRSC?
A tax-free benefit for retired veterans with combat-related disabilities.
What VA rating is required?
At least 10% for a combat-related condition.
Can I receive CRSC and CRDP together?
No, you must choose one.
Is CRSC retroactive?
Yes, up to six years.
Who processes CRSC payments?
DFAS, after service branch approval.
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