Special Compensation
By CWO4 Lewis Tolleson, USCG-Ret., Director; Lt. Col. William A. Pierce, USA-Ret.; and Capt. Bud Schneeweis, USCG-Ret. Benefits Information

Who is eligible for combat-related special compensation (CRSC)?

To be eligible for CRSC, you must be in retired status, have a qualifying combat-related disability or disabilities, and have elected to receive benefits under the CRSC provisions.

Generally, this means that you must have served 20 years in the uniformed services. A retired reservist must have accumulated 7,200 retirement points. Members recalled to or retained on active duty are not in retired status during the time of their recall or retention. 

Who will determine if I am eligible for CRSC?

You must apply to the military service from which you retired. Each service will receive, process, and decide on applications according to guidelines prescribed by the Department of Defense. It is up to your military service to make an individual determination about the combat-relatedness of each disability. Military services are required to advise all applicants of their final decisions. 

Are servicemembers retired under temporary early retirement authority eligible for CRSC?

No, unless they subsequently have been recalled to active duty long enough to accumulate 20 years or more of service. 

I have a Purple Heart but no disability award. Am I eligible for CRSC?

No. You must have a disability attributable to the incident that led to the Purple Heart award.

I have a 60 percent disability award, but only 40 percent is combat-related. I do not have a Purple Heart. Am I eligible for CRSC? 

Probably not, but you should check with your military service to be sure. 

Social Security

What income counts toward the Social Security earnings test limit?

A person’s earnings for a taxable year are the sum of pay for services as an employee plus all net earnings from self-employment (minus any net loss from self-employment) for that year.

“Wages” for Social Security purposes refers to gross wages––wages before any payroll deductions for income tax, Social Security tax, dues, insurance, or other deductions by the employer. Gross wages are used as the basis for Social Security credit and for determining whether benefits must be withheld because of the amount of money you earned.

Nonwork sources of income, such as inheritance payments, pensions (including military retired pay), in-vestments, IRA distributions, interest, or other sources, do not count as wages for the earnings test.

How much can I earn and still keep all of my Social Security benefits? 

If you’re younger than full retirement age (FRA), income received as a return for work effort can affect your monthly Social Security benefits, according to the following formulas: 

If you are younger than FRA: $1 will be deducted from Social Security benefits for every $2 you earn above the annual limit. For 2003, that limit is $11,520. Remember, the earliest age you can receive Social Security retirement benefits remains 62 even though the FRA is rising. 

In the year you reach your FRA: $1 will be deducted from Social Security benefits for every $3 you earn above a different limit (for 2003, the limit is $30,720), but only counting the money you earned before the month you reach FRA.

Starting with the month you reach FRA: You will receive your benefits with no limit on your earnings.

For more information about how income can affect your benefits, visit the Social Security Administration’s Web site at www.ssa.gov.