Combat-Related Special Compensation (CRSC)

Combat-Related Special Compensation (CRSC) is a tax-free monthly payment that gives retirees back the retired pay they have to waive in order to receive VA disability compensation — but only for disabilities that are combat-related. For many combat-injured retirees it's worth more than the alternative, and it's badly under-claimed.

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The offset it fixes: by law, most military retired pay is reduced dollar-for-dollar by the amount of VA disability compensation you receive. CRSC (and CRDP) restore some or all of that waived pay. CRSC is tax-free; CRDP is taxable.

Who qualifies

  • You're entitled to (or receiving) military retired pay — 20-year, medical (Chapter 61), or reserve/TERA retirement.
  • You have a VA disability rating of 10% or higher.
  • The disability is combat-related — caused by armed conflict, hazardous service, an instrumentality of war, or simulated war (training). This includes many Purple Heart conditions.

CRSC vs CRDP — you pick one

The two programs both restore waived retired pay, but you can't get both at once — DFAS pays whichever is more favorable, and there's an annual open season to switch.

  • CRDP (Concurrent Retirement & Disability Pay) — automatic if you have a 20-year retirement and a VA rating of 50% or higher. Taxable. Covers all service-connected conditions.
  • CRSC — you must apply and prove the condition is combat-related. Tax-free. Can apply even below 50%, and to medical retirees.

Compare the two for your numbers with the CRDP vs CRSC tool.

How to apply

  1. File DD Form 2860 with your branch of service (not the VA or DFAS) — each branch runs its own CRSC board.
  2. Include evidence linking each claimed condition to combat — Purple Heart orders, award citations, service/medical records, and your VA rating decision.
  3. If denied or under-rated, you can reconsider with more evidence. A free accredited VSO can help build the package.

Related: the CRDP vs CRSC calculator, 2026 VA disability rates, and the tax-free pay equivalent tool (CRSC is tax-free).

General information, not legal advice; combat-related determinations are made by your service branch. Confirm at your branch's CRSC office and DFAS. Source: U.S. Department of Defense / DFAS.

Frequently asked questions

What is CRSC?

Combat-Related Special Compensation is a tax-free monthly payment that restores military retired pay you waive to receive VA disability — but only for combat-related disabilities. You apply through your branch with DD Form 2860.

What’s the difference between CRSC and CRDP?

CRDP is automatic for 20-year retirees rated 50%+ and is taxable, covering all conditions. CRSC must be applied for, requires a combat-related disability, is tax-free, and can apply below 50% and to medical retirees. You receive whichever is more favorable, not both.

How do I apply for CRSC?

File DD Form 2860 with your branch of service (not the VA or DFAS), including evidence that each condition is combat-related — Purple Heart orders, award citations, and service/medical records.

Is CRSC taxable?

No. CRSC is tax-free, which is one reason it can be worth more than the taxable CRDP for combat-injured retirees.