Combat-Related Special Compensation (CRSC): Who Qualifies, and What It Actually Restores

Tax-free, available without twenty years of service — and capped in a way most explanations skip

First — make sure you're reading the right page

Five different payments get called "disability pay," and searching for one turns up answers about the others.

VA disability compensation. Paid by the VA for a service-connected condition. Tax-free.
Military retired pay. Paid by DFAS for your military service. Taxable.
CRDP — Concurrent Retirement and Disability Pay. 10 U.S.C. § 1414. Restores retired pay that was waived for VA compensation. Requires a combined VA rating of 50% or higher. Taxable. Paid automatically if you qualify; there is no application.
CRSC — Combat-Related Special Compensation. This page. 10 U.S.C. § 1413a. Also restores waived retired pay, but it is tax-free, it has no 50% rating floor, and it does not require twenty years of service. It does require that the disability be combat-related, and you have to apply for it.
Your FERS annuity. A civilian federal pension has nothing to do with any of the above. If you are here because you are a federal employee who is also a military retiree, start with VA disability and your FERS pension.

Written by: FedVetRetirement Editorial TeamLast reviewed: September 22, 2026

If you receive military retired pay and the VA also pays you disability compensation, you generally have to waive retired pay dollar for dollar to receive the VA money. Most retirees take that trade, because VA compensation is tax-free and retired pay is not. CRSC exists to give part of the waived retired pay back — and to give it back tax-free. It is the concurrent-receipt path that is open to medical retirees with short careers, who are shut out of the other one entirely.

The offset CRSC exists to undo

Under 38 U.S.C. §§ 5304 and 5305, you cannot be paid military retired pay and VA disability compensation for the same period without a waiver. In practice DFAS reduces retired pay by the amount of VA compensation you receive. Nothing is lost in the trade for most people — the VA money is untaxed — but the retired pay you earned through years of service disappears from the statement.

Concurrent receipt is the general name for getting some of it back. There are exactly two doors: CRDP and CRSC. This page is about the second one.

The three requirements

CRSC is not automatic and it is not granted on a rating alone. To qualify you must:

Be entitled to military retired pay. Any retirement — length of service or Chapter 61 disability retirement.
Be receiving VA disability compensation, with military retired pay waived to receive it.
Have a disability that meets one of the combat-related criteria in 10 U.S.C. § 1413a(e).

What 'combat-related' means in the statute

It is broader than 'wounded in a firefight' and narrower than 'happened while I was in.' The criteria are a disability incurred:

as a direct result of armed conflict;
while engaged in hazardous service;
in the performance of duty under conditions simulating war; or
through an instrumentality of war.

Training accidents, jump and dive injuries, and injuries from equipment and vehicles designed for war can all qualify. The question is never how bad the condition is — it is how it happened, and whether you can document how it happened.

You do not need twenty years

This is the part that surprises people, and it is the reason CRSC matters most to exactly the retirees who are told they have no options.

Concurrent receipt under CRDP is closed to a large group by statute. 10 U.S.C. § 1414(b)(2) says in one sentence that subsection (a) — the concurrent-receipt rule — 'does not apply to a member retired under chapter 61 of this title with less than 20 years of service.' A Chapter 61 retiree is someone medically retired. If you were medically retired short of twenty years, CRDP is not available to you, no matter how high your VA rating is.

CRSC has no such exclusion. A medical retiree with a handful of years of service can qualify, provided the disability is combat-related. For that group, CRSC is frequently the only concurrent receipt that exists in current law.

The cap nobody mentions

Being approved for CRSC does not mean the full offset comes back. There is a ceiling, and for short careers it is a low one.

CRSC, plus whatever retired pay is left after the VA offset, cannot exceed the retired pay you would have been entitled to based on your years of service alone.

For a twenty- or thirty-year retiree, the longevity-earned figure is large and the cap rarely binds. For someone medically retired after a few years, the longevity-earned figure is small — a few years times a small multiplier — while the disability retirement itself was computed on the rating, which can be far higher. The cap is measured against the small number.

That is why a retiree can be approved for CRSC and still see a payment far below the amount the VA offset took. Nothing has gone wrong when that happens. That is the statute working as written, and it is the single most common reason people believe their CRSC award was miscalculated.

CRSC or CRDP — you cannot have both

If you qualify for both, you receive one of them. 10 U.S.C. § 1414(d)(1) says a person eligible under both provisions 'may receive special compensation in accordance with that section or retired pay in accordance with this section, but not both.' § 1414(d)(2) requires an annual open season in which you can switch from one to the other.

The two are not interchangeable. CRSC is tax-free; CRDP is taxable. CRSC covers only combat-related disabilities; CRDP covers your whole rating once you are at 50%. Which one is worth more depends on how much of your rating is combat-related and on your tax situation — and it can change from one year to the next as ratings change.

Worth doing once a year: find out which one you are actually being paid, and whether the other would pay more. The open season exists precisely because the answer moves.

How to apply

You apply to your own uniformed service — not to the VA, and not to DFAS.

Each branch runs its own CRSC board.

The form is DD Form 2860, Claim for Combat-Related Special Compensation.
It goes to the CRSC board of the service you retired from.
It needs records supporting both halves: the condition itself, and the combat-related connection. The second half is where most claims are decided. Line-of-duty determinations, incident and accident reports, award citations, deployment orders, and the medical records contemporaneous with the event do more work than the rating decision does.

The VA rating establishes the disability. It does not establish how the disability happened. Those are separate evidentiary jobs, and CRSC turns on the second one.

Status as of 22 September 2026 — the Soto back-pay question

Everything above this line is settled law. Everything below it is a live legal and administrative situation that has moved three times in the last fourteen months. We date this section deliberately. Re-check it before you act on it.

Re-verified against the Army's CRSC page, the Navy CRSC Board's Soto page and DFAS on 22 September 2026. Nothing had changed.

What the Supreme Court decided. In Soto v. United States, 605 U.S. 360 (2025), decided 12 June 2025, the Court held unanimously, in an opinion by Justice Thomas, that 'the CRSC statute confers authority to settle CRSC claims and thus displaces the Barring Act's settlement procedures and limitations period.' In plain terms: the six-year limit in 31 U.S.C. § 3702 does not apply to CRSC claims. The opinion notes that the CRSC statute 'does not include a statute of limitations.'

What it does not do. Soto concerns retirees already approved for CRSC. It creates no new eligibility. If you have never applied, the case does not qualify you — the three requirements above still decide that.

How far back it can reach. DFAS's CRSC page sets floors: no earlier than 1 June 2003, and for disability retirees with fewer than twenty years, no earlier than 1 January 2008.

The services do not say the same thing as each other.

The Army's CRSC page (document review date 5 December 2025) says the six-year bar 'has been lifted,' that 'eligible retirees may now qualify for compensation retroactive to their initial eligibility date,' that 'No action required — the Army will update all CRSC claims automatically,' and that 'Over 7,000 claims will be reviewed; expect the process to take several months.' The same page also says: "However, implementation is on hold until the Department of Defense issues formal guidance." Both sentences are on the page. Read them together; either one alone is misleading. The page also says that "Currently barred claims are being tracked and will be updated once guidance is received."

The Navy CRSC Board's Soto page, which covers the Navy and the Marine Corps, describes a review already underway under Assistant Secretary of Defense (M&RA) guidance dated 20 August 2025: the Department of the Navy will review the records of all potentially impacted CRSC recipients, determine corrected effective dates, reissue decision documents, and send DFAS the original and corrected dates, after which DFAS computes and pays. It states: 'No immediate action is required. The Department of the Navy is reviewing over 15,000 claims. Those who are eligible for relief will be notified.' It does not mention a hold.

The Air Force's CRSC page does not mention Soto at all. DFAS's CRSC page goes further than silence: it still states the old rule in plain terms — "All retroactive pay is limited to six years from the date the VA awarded compensation for each disability" — on a page whose own footer reads "Page updated Jun 25 2024." Its CRDP/CRSC FAQs and the December 2025 retiree newsletter do not mention the case either.

The guidance underneath those reviews has been withdrawn. DoD issued interim guidance on 20 August 2025 and clarifying guidance on 30 January 2026, both of which are filed as exhibits in the litigation below. On 14 May 2026 the Department of Defense rescinded both. That rescission is confirmed in the court record: a Joint Status Report filed 19 May 2026, signed for the United States by Department of Justice counsel, states that 'on May 14, 2026, the Department of Defense (DoD) rescinded its August 20, 2025 guidance and its January 30, 2026 guidance.' The text of the rescinding memorandum has been published by veterans-law practitioners and described consistently by several of them; it does not appear on any Army, Navy or DFAS page, and nothing has been announced to retirees.

The litigation. Ploe v. United States (filed as Doe), No. 1:25-cv-01942-RMM, in the U.S. Court of Federal Claims. A class-certification motion filed 13 March 2026 is pending, and deadlines have been stayed by joint request since 19 May 2026 while the parties discuss settlement. The proposed class is, broadly, retirees whose CRSC applications were granted but who were denied CRSC for periods before they applied during which they met the eligibility requirements.

What we will not tell you. That payments have started. That a deadline exists. That you are owed a specific amount. That every veteran is owed back pay. None of that is on the record, and the places where you would expect to read it — your service's page, DFAS's page, a letter — are silent or contradict each other.

What practitioners who work these claims consistently advise — this is their advice, not government guidance: pull your own CRSC determination letters, find the effective date printed on them, and compare it to the first month you met all three requirements. If those two dates differ, that is the conversation to have with an accredited representative or an attorney before filing anything. Filing at the wrong time or in the wrong posture can limit what you recover.

Four things CRSC does not do

It does not change your VA rating or your VA payment. CRSC is paid by your service through DFAS, out of the retired-pay side of the ledger.
It does not reduce your FERS annuity. VA compensation and CRSC are military and VA benefits; neither appears in OPM's list of reductions to a FERS basic annuity. See VA disability and your FERS pension.
It is not made automatic by Soto. The decision removed a time limit for people already approved. Approval still requires DD Form 2860 and evidence.
It is not the same as the Major Richard Star Act. That bill would end the offset for Chapter 61 retirees with a combat-related disability. As introduced, its own text takes effect the first month after enactment and applies only to payments for months beginning on or after that date — there is no retroactivity and no back pay in the bill. It has not passed.

Where this sits in a retirement plan

If you are a federal employee as well as a military retiree, CRSC is one of several decisions that interact. The free Federal Retirement Checklist includes the military-retired-pay offset, CRDP and CRSC, the military service credit deposit, and CHAMPVA among its veteran-specific items — sequenced by how far out you are from your retirement date.

Frequently Asked Questions

What is CRSC?

Combat-Related Special Compensation is a tax-free payment under 10 U.S.C. § 1413a that restores part of the military retired pay a retiree waives in order to receive VA disability compensation. It is paid by your uniformed service through DFAS, and it applies only to disabilities that meet one of the combat-related criteria in the statute.

Do I need 20 years of service to receive CRSC?

No. CRSC has no twenty-year requirement. This is the key difference from CRDP: 10 U.S.C. § 1414(b)(2) excludes Chapter 61 medical retirees with fewer than twenty years of creditable service from concurrent receipt under that section. CRSC contains no equivalent exclusion, so for many short-career medical retirees it is the only concurrent receipt available.

Is CRSC taxable?

No. CRSC is tax-free. CRDP, the other concurrent-receipt payment, is taxable as retired pay. That difference alone can decide which of the two is worth more to you.

Can I receive CRSC and CRDP at the same time?

No. 10 U.S.C. § 1414(d)(1) provides that someone eligible under both may receive one or the other, but not both. § 1414(d)(2) requires an annual open season in which you may switch.

How do I apply for CRSC?

With DD Form 2860, submitted to the CRSC board of the uniformed service you retired from — not to the VA and not to DFAS. Include records establishing both the disability and its combat-related connection: line-of-duty determinations, incident reports, award citations, deployment orders, and contemporaneous medical records.

What counts as combat-related?

Under 10 U.S.C. § 1413a(e), a disability incurred as a direct result of armed conflict, while engaged in hazardous service, in the performance of duty under conditions simulating war, or through an instrumentality of war. Training and equipment-related injuries can qualify. Severity is not the test; causation is.

Why is my CRSC payment lower than the amount the VA offset took?

Because of the cap. CRSC plus any retired pay remaining after the offset cannot exceed the retired pay you would have been entitled to based on years of service alone. After a short career that longevity-earned figure is small, so the cap can hold the payment well below the offset. That is the statute working as written, not an error.

Does CRSC reduce my FERS pension?

No. CRSC and VA disability compensation are separate from a civilian federal annuity, and neither appears among OPM's reductions to a FERS basic annuity.

Did the Supreme Court's decision in Soto make everyone eligible for CRSC back pay?

No. Soto v. United States, 605 U.S. 360 (2025), held that the Barring Act's six-year limitations period does not apply to CRSC claims. It concerns retirees already approved for CRSC and creates no new eligibility. The administrative picture since the decision is unsettled — see the dated status section on this page.

Does the Major Richard Star Act pay back pay?

No. As introduced, the bill's amendments take effect the first day of the first month after enactment and apply only to payments for months beginning on or after that date. It has not passed.