How VA Disability Compensation Affects Military Retired Pay

How VA Disability Compensation Affects Military Retired Pay

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About the Author

Ostrom retired from the Air Force in 2000 after serving in a variety of personnel, education and training, and executive officer assignments. His assignments included tours in North Dakota, Florida, Korea, Australia, and the Pentagon. His final assignment was on the Joint Staff, writing and championing legislation related to joint officer personnel management issues. He earned numerous decorations and awards over his Air Force career.

After Air Force retirement, Ostrom was a practicing investment advisor at a large investment firm and a bank. He specialized in working with clients developing, implementing, and managing investment plans and portfolios.

A native of San Antonio, he earned a Bachelor of Arts and Master of Arts and is a graduate of the Royal Australian Air Command and Staff College and the U.S. Air Command and Staff College.

Ostrom joined the MOAA staff in 2006. His responsibilities include researching and writing articles and answering member inquiries regarding military benefits, health care, survivor issues, and financial concerns. He also travels extensively to discuss these matters with servicemembers and retirees and their families.

If you receive VA compensation for your VA disability, military retired pay is reduced by the VA waiver. The VA waiver is where you waive retired pay to receive VA compensation. The reason is because of double-dipping laws that state you can't be paid twice by the government for the same event.

Technically, VA disability compensation and retired pay are not the same event, but that is how it is applied. So more VA compensation means a greater decrease in your retired pay.

Retirees with concurrent receipt might not see a decrease in retired pay, but concurrent receipt ensures retirees receive enough retired pay to compensate them for their years of service.

Concurrent receipt will not restore retired pay above the amount due to years of service. Extra retired pay can occur when someone is medically retired from the military with a high service disability rating.

Concurrent receipt comes in two forms. You are allowed one or the other but not both at the same time. The Defense Finance and Accounting Service or your service's pay agency administers both forms, which are:

  • Concurrent Retirement and Disability Pay (CRDP). You must have 20-plus years of service and a VA rating of 50 percent or higher. If so, the VA waiver in your retired pay is removed and you are paid full retired pay. Read more details about CRDP.
  • Combat-Related Special Compensation (CRSC): CRSC is a separate payment from retired pay or VA compensation. It is separate because it is a tax-free payment. Your retired pay continues to be reduced by the VA waiver. CRSC reimburses you for the VA waiver amount in your retired pay. CRSC is available to any retiree, regardless of VA rating and regardless of years of service. However, the nature of your disabilities must be combat-related as determined by your service. Read more details about CRSC.
 

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