What CRSC is and how the payment works

CRSC stands for Concurrent Retirement and Disability Pay, a program run by the Department of Defense that lets military retirees receive both their retirement pay and VA disability compensation at the same time. Without CRSC, you would normally have to choose one or the other — the military would offset your retirement pay by the amount of your VA disability rating. CRSC removes that offset for certain retirees.

Your CRSC payment is not a separate check. Instead, it is the difference between what you were receiving before CRSC and what you receive after. The military continues to pay your retirement, and the VA continues to pay your disability compensation, but the military stops reducing your retirement pay to account for the disability money.

You must meet specific criteria to receive CRSC: you need to be a military retiree with at least 20 years of service, have a VA disability rating of at least 50 percent, and have retired before January 1, 2007 (with some exceptions for those who retired after that date under different rules). If you meet these conditions, you do not calculate CRSC yourself — the military and VA handle it once you are approved.

Key Takeaways

  • CRSC removes the offset between military retirement pay and VA disability compensation, so you receive both in full without one reducing the other.
  • You must be a military retiree with 20+ years of service, a VA disability rating of 50 percent or higher, and have retired before January 1, 2007 (with limited exceptions).
  • Your CRSC payment amount equals the difference between your old retirement pay (with the offset) and your new retirement pay (without the offset).
  • The military Defense Finance and Accounting Service (DFAS) and the VA coordinate the payment; you do not need to calculate it yourself once approved.
  • Processing your CRSC request takes several months, and back pay is usually issued as a lump sum once the decision is final.

The math behind the offset and the CRSC amount

To understand what CRSC pays you, you need to see how the offset worked before. When you retired from the military, you began receiving monthly retirement pay based on your rank, years of service, and the military retirement formula. If you then received a VA disability rating, the military would subtract (offset) that VA payment from your retirement check. You received the VA money separately, but your retirement check went down by that same amount — so you were not actually ahead.

Your CRSC payment is the amount the military was offsetting. If your military retirement was $3,000 per month and your VA disability compensation was $1,500 per month, the military would have paid you $1,500 in retirement (after the offset) plus the $1,500 from the VA, totaling $3,000. With CRSC approved, the military pays the full $3,000 retirement, and the VA still pays $1,500, so your total is now $4,500. The CRSC payment is $1,500 — the difference between the old total and the new total.

The exact amount depends on your specific retirement pay and your VA disability rating at the time you retired. The military and VA use your official records to calculate this; you will not need to do the math yourself. However, you can estimate your CRSC amount by looking at your current retirement pay statement and your VA disability letter to see what the offset currently is.

Who calculates and approves your CRSC payment

The Defense Finance and Accounting Service (DFAS) handles military retirement pay, and the Department of Veterans Affairs (VA) handles disability compensation. When you request CRSC, both agencies must work together to verify your may be able to access and calculate your payment.

You submit your CRSC request to DFAS, which is the military pay office. DFAS then contacts the VA to confirm your disability rating and the date you retired. The VA provides the information DFAS needs to remove the offset from your retirement pay. Once both agencies agree on the numbers, DFAS updates your retirement pay and issues back pay for the months you were may be able to access but had not yet received CRSC.

This coordination takes time — typically three to six months or longer, depending on how quickly each agency processes the request and whether your file has any complications. You will receive a letter from DFAS once the decision is made, showing your new retirement pay amount and the CRSC payment you will receive going forward.

How to request CRSC and what documents you need

To request CRSC, contact DFAS directly. You can call the DFAS Retired and Annuitant Pay Customer Service at 1-800-321-1080, or you can submit a written request by mail or through the DFAS website. You will need to provide your Social Security number, military service number, and current mailing address.

DFAS will ask you to confirm that you meet the may be able to access requirements: at least 20 years of military service, a VA disability rating of 50 percent or higher, and retirement before January 1, 2007 (or after that date under the Concurrent Retirement and Disability Pay Reform Act if you retired as an O-4 or higher or with 20+ years of service). Have your military discharge papers and your VA disability rating letter ready when you call, though DFAS can often look up this information in their system.

You do not need to submit a separate form to the VA — DFAS handles the coordination. However, make sure your VA disability rating is current and accurate. If your rating has changed since you retired, DFAS will use your current rating to calculate CRSC, which may increase or decrease your payment.

When back pay is issued and how it appears on your account

Once DFAS approves your CRSC request, you become may be able to access for back pay going back to the date you first met all the requirements. For most retirees, that date is the first day of the month after you received your 50 percent or higher VA disability rating. DFAS calculates the total amount owed for all those months and issues it as a lump sum, usually within one to two months after the approval decision.

The back pay will appear as a separate deposit in your bank account or as an additional check, depending on how your retirement pay is set up. Your retirement pay statement (called a Leave and Earnings Statement or LES) will show the back pay separately from your regular monthly payment. After the back pay is issued, your monthly retirement pay will increase by the CRSC amount going forward.

Back pay can be substantial if you have been retired for many years with a high disability rating. For example, if you were owed $1,500 per month in CRSC and you have been retired for five years, your back pay could be around $90,000 before taxes. Keep in mind that CRSC payments are subject to federal income tax, so the amount you actually receive after taxes will be less than the gross amount DFAS calculates.

What happens if your VA rating changes after CRSC is approved

If your VA disability rating increases after CRSC is approved, your CRSC payment will increase as well. The VA will notify DFAS of the rating change, and DFAS will recalculate your retirement pay offset. You will receive back pay for the months between the rating increase and the date DFAS processes the change.

If your VA disability rating decreases below 50 percent, you will lose CRSC may be able to access. Your retirement pay will go back to being offset by your VA disability compensation. This is rare for retirees with service-connected disabilities, but it can happen if the VA determines your condition has improved. DFAS will notify you of any changes to your CRSC status.

You do not need to do anything when your rating changes — the VA and DFAS coordinate automatically. However, it is a good idea to check your DFAS pay statement each month to make sure your CRSC payment reflects your current VA rating.

Common reasons CRSC requests are delayed or denied

CRSC requests are sometimes delayed because DFAS and the VA cannot quickly confirm your may be able to access. This happens most often when your military records are incomplete, your VA disability rating is not yet finalized, or you retired under a different retirement system than the standard one. If your request is delayed, DFAS will send you a letter explaining what information is needed and asking you to provide it.

Requests are denied if you do not meet the may be able to access requirements. The most common reason is a VA disability rating below 50 percent. If you have a rating of 40 percent or lower, you cannot receive CRSC. Another common reason is retiring after January 1, 2007, unless you fall under one of the exceptions (such as retiring as an O-4 or higher or under the Concurrent Retirement and Disability Pay Reform Act). If your request is denied, the letter will explain why and tell you whether you can appeal or reapply if your circumstances change.

If you believe your request was denied in error, you can contact DFAS to ask for a review. Bring documentation of your retirement date, your military rank and years of service, and your VA disability rating letter. DFAS can often resolve the issue over the phone if the problem is a simple data entry error.

Frequently Asked Questions

Can I estimate my CRSC payment before I request it?

Yes. Look at your current military retirement pay statement and your VA disability letter. The amount the military is currently offsetting from your retirement pay is roughly what your CRSC payment will be. For example, if your retirement pay statement shows a deduction for VA disability compensation, that deduction amount is your estimated CRSC payment. The exact amount may vary slightly depending on any pay adjustments or changes to your rating.

Do I have to pay taxes on my CRSC payment?

Yes. CRSC payments are considered military retirement income and are subject to federal income tax. State income tax may also apply depending on where you live. The amount withheld for taxes is based on the W-4 form you have on file with DFAS. You can adjust your withholding if you want to change how much tax is taken out each month.

What if I retired before 2007 but my VA rating came later?

You can still receive CRSC as long as you eventually received a VA disability rating of 50 percent or higher. Your CRSC may be able to access starts on the first day of the month after your rating is finalized, not the date you retired. DFAS will calculate back pay from that date forward, so you may receive a substantial lump sum if several years passed between your retirement and your rating.

Can I receive CRSC if I am also receiving Survivor Benefit Plan (SBP) payments?

Yes. CRSC and SBP are separate programs and do not offset each other. You can receive both your full military retirement (with CRSC), your VA disability compensation, and your SBP payment at the same time. However, SBP premiums are deducted from your retirement pay before CRSC is calculated, so your CRSC amount may be slightly lower than if you were not enrolled in SBP.

How long does it take to receive my back pay after CRSC is approved?

Back pay is usually issued within one to two months after DFAS sends you the approval letter. The exact timing depends on how quickly DFAS processes the payment and how your bank handles deposits. You will see the back pay as a separate deposit or check. If you do not receive it within two months of approval, contact DFAS to confirm the payment was sent.