M21-1 Manual  /  Part VI, Subpart ii, Chapter 4, Section A

Elections and Waivers in Military Retired Pay (MRP) Cases

M21-1, Part VI, Subpart ii, Chapter 4, Section A

Overview

In This Section

This section contains the following topics:
TopicTopic Name
1Prohibition of Concurrent Payment of Department of Veterans Affairs (VA) Benefits and MRP
2Obtaining an Election or Waiver of MRP
3Handling a Claim With an Election or Waiver of MRP
4Handling a Claim for Current-Law Pension
5Handling Elections or Waivers of MRP in Incompetency Cases
6Concurrent Retirement and Disability Pay (CRDP)
7Concurrent Payment of VA Benefits and Combat-Related Special Compensation (CRSC)

1. Prohibition of Concurrent Payment of VA Benefits and MRP


Introduction

This topic contains information on the prohibition of concurrent payment of VA benefits and MRP, including
  • restriction on the concurrent payment of VA benefits and MRP
  • retainer pay as a form of MRP
  • prohibition under 38 CFR 3.750 of combined benefits to exceed the amount of the greater benefit
  • unrestricted election, reelection, or waiver of MRP
  • advantage of waiving MRP
  • determining whether a Veteran receives MRP
  • verifying the amount of MRP a Veteran receives, and
  • deferring award action in the absence of an election or waiver.

Change Date

June 3, 2026

VI.ii.4.A.1.a. Restriction on the Concurrent Payment of VA Benefits and MRP

38 U.S.C. 5304(a) provides a statutory restriction on the concurrent payment of military retired pay (MRP) and the following types of Department of Veterans Affairs (VA) benefits:
  • disability compensation
  • Section 306 Pension, and
  • Old-Law Pension.
Notes:Important:
  • Some Veterans are entitled to
    • concurrent payment of disability compensation and MRP under the National Defense Authorization Act for Fiscal Year 2004, or
    • reimbursement for waived MRP under the National Defense Authorization Act for Fiscal Year 2003.
  • Retroactive stop-loss special pay that the Department of War (DOW) paid between September 11, 2001, and September 30, 2009, is notconsidered MRP. Accordingly, there is no restriction on concurrent payment.
Reference: For more information on the concurrent payment of disability compensation and MRP, see
  • M21-1, Part VI, Subpart ii, 4.A.6.b, and
  • M21-1, Part VI, Subpart ii, 4.A.7.a.

VI.ii.4.A.1.b. Retainer Pay as a Form of MRP

Naval and Marine Corps enlisted personnel with 20 or more years but less than 30 years of service may request transfer to the Fleet Reserve or Fleet Marine Corps Reserve and receive retainer pay.Retainer pay and MRP are similar in that neither may be awarded concurrently with VA disability compensation, Section 306 Pension, or Old-Law Pension. The retainer pay, as a form of MRP, must be waived under 38 CFR 3.750 before a Veteran may receive any of these three VA benefits.

VI.ii.4.A.1.c. Prohibition Under 38 CFR 3.750 of Combined Benefits to Exceed the Amount of the Greater Benefit

38 CFR 3.750(c) prohibits the total of the monthly payments (combined VA benefits and MRP) to the Veteran from exceeding the greater amount of the following benefits:
  • the VA benefit, or
  • the MRP or retainer pay.

VI.ii.4.A.1.d. Unrestricted Election, Reelection, or Waiver of MRP

Per 38 CFR 3.750(d), there is no restriction on the right of election, reelection, or waiver of MRP by
  • members of the Armed Forces, or
  • commissioned officers of the
    • National Oceanic and Atmospheric Administration (NOAA), or
    • United States Public Health Service (PHS).
Note: Previous agencies of the Coast and Geodetic Survey and Environmental Science Services Administration were incorporated into NOAA.

VI.ii.4.A.1.e. Advantage of Waiving MRP

Veterans frequently waive only MRP or retainer pay equal to the amount of disability compensation, Section 306 Pension, or Old-Law Pension. Since disability compensation, Section 306 Pension, and Old-Law Pension are not taxable benefits, but MRP from the Armed Forces based on age or length of service is taxable, there is an obvious advantage for a Veteran to waive MRP. Note: When MRP is waived in claims for Section 306 Pension or Old-Law Pension, 90 percent of the waived MRP counts as income following the 10-percent statutory exclusion, per 38 CFR 3.262(e)(2) and 38 CFR 3.262(h).

VI.ii.4.A.1.f. Determining Whether a Veteran Receives MRP

To avoid overpayments, carefully examine the following information sources to determine if MRP has been granted:If it cannot be determined whether a service department is paying MRP,
  • request such information from the Veteran, and
  • ensure that the service department verifies any conflicting information.
Reference: For more information on using VIS, see the VIS User Guide.

VI.ii.4.A.1.g. Verifying the Amount of MRP a Veteran Receives

MRP and Survivor Benefit Plan payments may be verified on the DFAS/CG PAYMENTS tab in VIS. If the Veteran was recently discharged, or MRP information is not available in VIS,
  • call Defense Finance and Accounting Service (DFAS) by dialing 1-866-622-4602, and selecting option 2 to obtain MRP information for Air Force, Army, Marine Corps, Space Force, and Navy retirees
  • utilize the Retired Casualty Pay Subsystem (RCPS) to obtain MRP information for Air Force, Army, Marine Corps, and Space Force retirees
  • call the Coast Guard by dialing 1-866-772-8724 to obtain MRP information for Coast Guard, NOAA, and PHS retirees, or
  • contact the local regional office’s (RO’s) MRP Coordinator, if one has been appointed, for assistance.
References: For more information on

VI.ii.4.A.1.h. Deferring Award Action in the Absence of an Election or Waiver

If a Veteran in receipt of MRP, including one on the Temporary Disability Retirement List (TDRL), becomes entitled to disability compensation, take no award action in the absence of an election or an effective waiver. Reference: For more information on removal of a Veteran from the TDRL, see M21-1, Part VI, Subpart ii, 4.B.6.

2. Obtaining an Election or Waiver of MRP

Introduction

This topic contains information on obtaining an election or waiver of MRP, including
  • determining whether a waiver of MRP is required
  • accepting an application for benefits as an election or waiver
  • using VA Form 21-651, Election of Compensation in Lieu of Retired Pay or Waiver of Retired Pay to Secure Compensation From Department of Veterans Affairs (38 U.S.C. 5304(a)-5305), to obtain an election or waiver
  • interacting with retired pay centers (RPCs) to certify an election or waiver
  • action to take upon receipt of an election or waiver and establishment of entitlement to VA benefits
  • determining whether a Veteran is eligible for full CRDP
  • documenting eligibility for full CRDP, and
  • notifying Insurance Service of an election or waiver of VA benefits.

Change Date

January 26, 2026

VI.ii.4.A.2.a. Determining Whether a Waiver of MRP Is Required

Veterans entitled to MRP must waive MRP in order to receive disability compensation. Exception: Per 10 U.S.C. 1414, 38 U.S.C. 5305, and 38 CFR 3.750(c), a waiver of MRP is not required when a Veteran is eligible for full Concurrent Retirement and Disability Pay (CRDP). Note: The renouncement of disability compensation, as discussed in M21-1, Part X, Subpart iv, 4, is not the same as not waiving MRP based on receipt of disability compensation. Reference: For information on determining whether a Veteran is eligible for full CRDP, see M21-1, Part VI, Subpart ii, 4.A.2.f.

VI.ii.4.A.2.b. Accepting an Application for Benefits as an Election or Waiver

Per 38 CFR 3.750(c), a Veteran’s application for VA benefits on VA Form 21-526(edition of November 1977 or later), VA Form 21-526c, orVA Form 21-526EZ constitutes an election or waiver in the absence of a specific statement to the contrary.Note: VA discontinued the use of VA Form 21-526 on February 19, 2019, and VA Form 21-526c on May 1, 2019. Waivers/elections Veterans made on the forms prior to rescission remain valid. Reference: For more information on handling discontinued forms, see M21-1, Part II, Subpart i, 2.B.4.e.

VI.ii.4.A.2.c. Using VA Form 21-651 to Obtain an Election or Waiver

Use VA Form 21-651, Election of Compensation in Lieu of Retired Pay or Waiver of Retired Pay to Secure Compensation From Department of Veterans Affairs (38 U.S.C. 5304(a)-5305), when it is necessary to obtain the Veteran’s or fiduciary’s signature on the election or waiver. When furnishing the form to the Veteran or fiduciary, complete the first five items. The form includes instructions to the Veteran or fiduciary to sign and date the form and return it to the VA office shown in Block 1 of the form.

VI.ii.4.A.2.d. Interacting With RPCs to Certify an Election or Waiver

Retired pay centers (RPCs) accept award action by VA as certification that an election or waiver is on file with VA without requiring “hard copy” documentation. VA is responsible for providing RPCs with a completed copy of one of the forms listed in M21-1, Part VI, Subpart ii, 4.A.2.e (or other relevant documentation) only upon receipt of a specific request. Do not routinely forward election or waiver forms to RPCs. Note: When an RPC does request a copy of VA Form 21-651 or other form constituting an election or waiver, the responding RO must prepare a locally generated letter that shows the amounts and effective dates of VA's payment of compensation.

VI.ii.4.A.2.e. Action to Take Upon Receipt of an Election or Waiver and Establishment of Entitlement to VA Benefits

Take award action in accordance with instructions in M21-1, Part VI, Subpart ii, 4.B when VANote: Do not defer award action pending confirmation from the RPC of a waiver of MRP.

VI.ii.4.A.2.f. Determining Whether a Veteran is Eligible for Full CRDP

Veterans are eligible for full CRDP if
  • retirement was for any reason other than disability
  • VA grants disability compensation based on a combined disability rating of
    • at least 50 percent from January 1, 2014, or
    • 100 percent (including a rating of total disability based on individual unemployability (TDIU)) from January 1, 2005, and
  • there is no eligibility to Combat-Related Special Compensation (CRSC).
Important: Veterans are not eligible for CRSC at the time VA processes the initial, compensable disability rating decision because the Veteran is not yet in receipt of disability compensation. References: For more information on

VI.ii.4.A.2.g. Documenting Eligibility for Full CRDP

After determining a waiver of or withholding MRP is not required because a Veteran is eligible for full CRDP, claims processors must upload into the Veteran’s electronic claims folder the documentation described in the right-hand column of the table below as proof the Veteran meets the eligibility requirement listed in the left-hand column.
Eligibility RequirementDocumentation
The Veteran is retired for any reason other than disability.Screenshot of the
  • MILITARY HISTORY segment in VIS that displays A, B, or C in the column labeled Ret Type
  • DFAS/CG PAYMENTS screen in VIS that displays A, B, or C in the column labeled Ret Type Cd, or
  • HUNT MBRENT screen in RCPS that displays something other than
    • no RET LAW field, or
    • a RET LAW field that is blank or contains one of the following entries: 1201, 1202, 1204, 1205, or 0000.
Notes:
  • When RCPS and VIS contain conflicting data, use the data in RCPS, as it is more up-to-date.
  • RCPS does not contain data for Veterans that retired from the Coast Guard, PHS, or NOAA.
Reference: For more information on using VIS, see the VIS User Guide.
The Veteran has not established CRSC eligibility.
  • If the Veteran retired from the Army, Navy, Air Force, Space Force, or Marine Corps, documentation consists of a screenshot of the SCCR screen in RCPS that displays the
    • correct Social Security number (SSN), and
    • message SSN WAS NOT FOUND IN THE CRSC MASTER.
  • If the Veteran retired from the Coast Guard, PHS, or NOAA, documentation consists of a VA Form 27-0820, Report of General Information, on which a claims processor has documented certification from the Coast Guard Retiree and Annuitant Service Branch (CGRASB) that the Veteran has not established CRSC eligibility.
    • Claims processors may obtain the referenced certification from CGRASB by calling 866-772-8724.
    • Claims processors may disregard the checkboxes on VA Form 27-0820 to the right of which reads
      • I certify that I properly identified my caller using the ID Protocol, and
      • I read the following statement to the caller.
Notes:
  • To view relevant data on the SCCR screen in RCPS,
    • type SCCR in the upper left-hand corner of the first screen that appears after accessing RCPS
    • press the ENTER key on the keyboard, and
    • enter the Veteran’s SSN in the field that follows SCCR – leaving one blank space between SCCR and the Veteran’s SSN – on the CRSC ACCOUNT INQUIRY screen.
  • Use the F3 key to exit the SCCR screen.
References: For more information on

VI.ii.4.A.2.h. Notifying Insurance Service of an Election or Waiver of VA Benefits

Follow the procedures in M21-1, Part V, Subpart iv, 1.D.2.c to notify Insurance Service of an election or waiver of VA benefits.

3. Handling a Claim With an Election or Waiver of MRP

Introduction

This topic contains information on handling a claim with an election or waiver of MRP, including
  • process for handling a statement of an election or waiver of MRP
  • notifying Veterans who elected to receive MRP of the determinations VA made on the claim
  • furnishing VA Form 21-651 and informing the Veteran of the restriction on concurrent payments
  • effective date of VA benefit payments when Veterans waive a portion of MRP
  • effect of the recoupment of readjustment or separation pay on VA’s offset of benefits for receipt of MRP
  • processing a supplemental claim VA receives one year or more after denying a claim because the Veteran elected to receive MRP
  • informing Veterans of eligibility for ancillary benefits, and
  • notifying Insurance Service after denying a claim because the Veteran elected to receive MRP.

Change Date

June 3, 2026

VI.ii.4.A.3.a. Process for Handling a Statement of an Election or Waiver of MRP

Follow the instructions in the table below when
  • the rating activity
    • grants service connection (SC), and
    • assigns a compensable disability rating, and
  • either the Veteran or fiduciary
    • submits a statement indicating that the Veteran does not want the claim to constitute a waiver of MRP, or
    • elects MRP instead of disability compensation by submitting a signed VA Form 21-526EZ, with Block 26 marked.
Exception:
  • As stated in M21-1, Part VI, Subpart ii, 4.A.2.a, a waiver of MRP is not required when a Veteran is eligible for full CRDP.
  • If a Veteran who is not eligible for MRP takes one of the actions described in the preceding paragraph,
    • process the rating decision but disregard the steps in the table below, and
    • notify the Veteran in the corresponding decision notice that VA cannot act on the election because there is no eligibility for MRP.
StepActionReference
1
  • Process the rating decision.
  • Deny entitlement to compensation by selecting No Waiver of Retired Pay on the BASIC ELIGIBILITY screen in the awards processing system.
Important: Rating decision data becomes part of the Veteran’s corporate record only when an award is processed. Reference: For more information on processing a basic eligibility denial in the Veterans Benefits Management System (VBMS) Awards, see the VBMS Awards User Guide.		See M21-1, Part VI, Subpart ii, 4.A.1.
2Notify the Veteran of the determination made on the claim.See M21-1, Part VI, Subpart ii, 4.A.3.b.
3Inform the Veteran of the restriction of concurrent payments of VA benefits and MRP and how to elect VA compensation. See M21-1, Part VI, Subpart ii, 4.A.3.c.
4Inform the Veteran of the effective date for the VA benefit payments if a waiver is received.See M21-1, Part VI, Subpart ii, 4.A.3.d.
5Inform the Veteran of the effect that the recoupment of readjustment or separation pay has on VA’s offset of benefits for MRP, if necessary.See M21-1, Part VI, Subpart ii, 4.A.3.e.
6Inform the Veteran of eligibility for ancillary benefits.See M21-1, Part VI, Subpart ii, 4.A.3.g.
7If the rating activity has determined that a review examination is necessary, maintain a future diary for the examination.See M21-1, Part VI, Subpart ii, 4.A.3.h and i.
Notes:

VI.ii.4.A.3.b. Notifying a Veteran Who Elected to Receive MRP of the Determinations VA Made on the Claim

If VA denies a claim because the Veteran elected MRP instead of disability compensation, send a decision notice informing the Veteran of the
  • disabilities for which VA awarded SC
  • disabilities for which VA denied SC, and
  • rate payable, including
    • scheduled future changes, and
    • additional benefits payable because of, for example, dependents and/or entitlement to SMC.
References: For more information on

VI.ii.4.A.3.c. Furnishing VA Form 21-651 and Informing the Veteran of the Restriction on Concurrent Payments

In addition to taking the actions described in M21-1, Part VI, Subpart ii, 4.A.3.a, when notifying the Veteran of the determination made on the claim,

VI.ii.4.A.3.d. Effective Date of VA Benefit Payments When a Veteran Waives a Portion of MRP

If Veterans waive a portion of MRP, the full rate of disability compensation will begin as of the effective date of the reduction of the MRP. Reference: For more information on the effective date referenced in the preceding paragraph, see VAOPGCPREC 7-2001.

VI.ii.4.A.3.e. Effect of the Recoupment of Readjustment or Separation Pay on VA’s Offset of Benefits for Receipt of MRP

The recoupment of a prior award of readjustment or separation pay by a service department does not affect the VA offset for the receipt of MRP. However, VA may be required to repay amounts of readjustment or separation pay previously recouped by VA. If separation pay was recouped by both VA and the service department, VA may have to refund the amount of separation pay withheld. Reference: For more information on handling the recoupment of separation or readjustment pay by both VA and a service department, see M21-1, Part VI, Subpart ii, 2.2.i.

VI.ii.4.A.3.f. Processing a Supplemental Claim VA Receives One Year or More After Denying a Claim Because the Veteran Elected to Receive MRP

If VA receives the following from a Veteran, one year or more after VA denied entitlement to disability compensation because the Veteran elected MRP, the authorization activity may grant entitlement to disability compensation, based on the most recent rating decision, effective the date of claim: Exception: Before the authorization activity may grant entitlement to disability compensation for a service-connected (SC) disability that, according to the most recent rating decision, is subject to a future review examination, the
  • Veteran must undergo a VA examination of the disability (unless the medical evidence of record is adequate (for rating purposes) to determine the current level of disability), and
  • rating activity must reevaluate the disability to determine whether it has improved.
Important: The exception described in the previous paragraph applies only if the date the rating activity selected for the review examination has already passed.

VI.ii.4.A.3.g. Informing Veterans of Eligibility for Ancillary Benefits

If a rating decision establishes basic eligibility to Dependents' Educational Assistance (DEA) and/or ancillary benefits, VA must notify Veterans of eligibility, regardless of whether or not VA ultimately denies the claim because the Veteran elected to receive MRP. References: For more information on notifying Veterans of eligibility for

VI.ii.4.A.3.h. Notifying Insurance Service After Denying a Claim Because the Veteran Elected to Receive MRP

After denying a claim because the Veteran elected to receive MRP instead of disability compensation, notify Insurance Service.

4. Handling a Claim for Current-Law Pension

Introduction

This topic contains information on handling a claim for current-law pension including
  • no requirement for waiver of MRP for current-law pension claims, and
  • handling an election of current-law pension over disability compensation, Section 306 Pension, or Old-Law Pension.

Change Date

June 25, 2015

VI.ii.4.A.4.a. No Requirement for Waiver of MRP for Current-Law Pension Claims

Effective October 1, 1980, an election or waiver is not required to pay current-law pension to a Veteran entitled to, or in receipt of, MRP. Consider the amount of MRP as income, as with any other retirement income.

VI.ii.4.A.4.b. Handling an Election of Current-Law Pension Over Disability Compensation, Section 306 Pension, or Old-Law Pension

If a Veteran who is entitled to MRP elects current-law pension over disability compensation, Section 306 Pension, or Old-Law Pension,
  • send a locally-generated letter to the appropriate RPC, and
  • certify the date of award for current-law pension so that payment of MRP may be resumed.
Note: Waived MRP counts as income for current-law pension under 38 CFR 3.262(h). Reference: For more information on contacting an RPC, see M21-1, Part VI, Subpart ii, 4.C.2.f.

5. Handling Elections or Waivers of MRP in Incompetency Cases


Introduction

This topic contains information on handling elections or waivers of MRP in incompetency cases, including
  • who may elect or waive MRP with a service department finding of incompetency
  • service department incompetency determinations and the designation of a trustee
  • handling a service department’s finding of a Veteran’s incompetency
  • action to take if a fiduciary hub doesn’t recognize a service department-appointed fiduciary
  • handling an election or waiver from
    • a spouse-payee, and
    • an institutional payee
  • advising a fiduciary of a reduction of VA benefits and the right to reelect MRP
  • what service departments require before accepting an election or waiver based on restored competency, and
  • withholding disability compensation in incompetency cases.

Change Date

January 26, 2026

VI.ii.4.A.5.a. Who May Elect or Waive MRP With a Service Department Finding of Incompetency

If a service department finds that a Veteran is mentally incompetent, only a trustee or fiduciary recognized by one of the military services may make an election or waiver of MRP. Do not accept an election or waiver based on a Veteran’s signature on the forms listed in M21-1, Part VI, Subpart ii, 4.A.2.e when a service department holds the Veteran to be incompetent. If required under State law, a court must authorize the fiduciary or trustee to make an election or waiver before such election or waiver is processed.

VI.ii.4.A.5.b. Service Department Incompetency Determinations and the Designation of a Trustee

Per 37 U.S.C. 602, a board of medical officers or physicians is required to
  • find a member of the Armed Forces mentally incompetent, or
  • determine restored competency
If the board finds the member is incompetent, the Secretary of the Veteran’s service department designates a trustee to receive the Veteran’s MRP.

VI.ii.4.A.5.c. Handling a Service Department’s Finding of a Veteran’s Incompetency

Follow the steps in the table below to handle a service department’s finding of a Veteran’s incompetency.
StepAction
1Refer the service department’s findings to the rating activity for a competency rating. Note: Base this rating action on the Physical Evaluation Board findings, if possible. If needed, request that a VA examination be conducted in accordance with 38 CFR 3.326.
2Does the evidence of record support a finding of incompetency?
  • If yes,
    • follow the instructions in M21-1, Part X, Subpart ii, 6.A.3.a for
      • preparing a proposed rating of incompetency, and
      • notifying the Veteran of the proposed rating, and
    • refer the case to the fiduciary hub of jurisdiction.
  • If no,
    • complete a final rating of competency
    • notify the Veteran of the decision, and
    • disregard the remaining steps in this table.
References: For more information on
3Did a fiduciary hub complete the final VA rating of incompetency?
4Did the fiduciary hub recognize the same fiduciary as the service department?
  • If yes, prepare a denial and notify the fiduciary, as provided in M21-1, Part VI, Subpart ii, 4.A.3.a, without regard to the election indicated on any of the forms listed in M21-1, Part VI, Subpart ii, 4.A.2.e. (Do not apply the provisions of M21-1, Part VI, Subpart ii, 4.A.2 in this case.)
  • If no, follow the instructions in M21-1, Part VI, Subpart ii, 4.A.5.d.

VI.ii.4.A.5.d. Action to Take if a Fiduciary Hub Doesn’t Recognize a Service Department-Appointed Fiduciary

Use the table below to determine the appropriate action to take when a fiduciary hub does not recognize a service department’s appointment of a fiduciary.
If the fiduciary hub …Then …
  • finds that the
    • military trustee is not acceptable as a VA fiduciary, or
    • already-appointed military trustee is no longer willing to serve as the VA fiduciary
  • certifies a new VA fiduciary, and
  • advises the authorization activity as to why the military trustee could not be recognized as a fiduciary
the authorization activity
  • forwards the fiduciary hub’s report with the waiver to the applicable service department, and
  • requests that the service department recognize the proposed VA fiduciary as the trustee with authority to waive MRP.
recommends a supervised direct payment to the beneficiarya military trustee or VA fiduciary is still required to elect or waive MRP on the beneficiary’s behalf.

VI.ii.4.A.5.e. Handling an Election or Waiver From a Spouse-Payee

Upon receipt of an election or waiver of MRP from a spouse-payee who was appointed trustee by the military, prepare and furnish VA Form 21-592 to the fiduciary hub to either
  • determine the suitability of the spouse-payee, or
  • secure another fiduciary.

VI.ii.4.A.5.f. Handling an Election or Waiver From an Institutional Payee

Use the table below to determine the election or waiver requirements when a service department appoints an institution as a Veteran’s trustee.
If the service department appoints a … Then the trustee may …
director or superintendent of a non-VA institution as the Veteran’s trusteeelect or waive MRP and apply for VA benefits. Notes:
  • The trustee may not elect or waive VA benefits until VA recognizes the trustee as the fiduciary.
  • The authorization activity must refer VA Form 21-592 to the fiduciary hub for recognition of the fiduciary.
VA medical center as the Veteran’s trusteenot elect or waive VA benefits in lieu of MRP. Note: If the payment of VA benefits is more advantageous to the Veteran, refer VA Form 21-592 to the fiduciary hub for recognition of a fiduciary to make the appropriate election or waiver.

VI.ii.4.A.5.g. Advising a Fiduciary of a Reduction of VA Benefits and the Right to Reelect MRP

When VA awards benefits as a result of a total waiver of MRP then VA subsequently reduces or terminates benefits due to improvement in the Veteran’s condition, advise the Veteran’s fiduciary of the right to reelect MRP. Note: A reelection is not required if MRP exceeds the amount of VA benefits payable and there is a partial waiver in place. Under these circumstances, the Veteran’s service department automatically adjusts the benefits.

VI.ii.4.A.5.h. What Service Departments Require Before Accepting an Election or Waiver Based on Restored Competency

As with a finding of incompetency, service departments will recognize a finding that a Veteran’s competency has been restored only if it is provided by a board of medical officers or physicians. A VA rating of restored competency and the examination report on which it was based must
  • accompany any reelection of MRP by the Veteran, and
  • be submitted to, and accepted by, the Veteran’s service department before VA may take action on the Veteran’s election.

VI.ii.4.A.5.i. Withholding Disability Compensation in Incompetency Cases

If VA receives a waiver of MRP in an incompetency or proposed incompetency case, withhold disability compensation according to the instructions in M21-1, Part VI, Subpart ii, 4.B, without regard to where the Veteran’s case is in the process. Important: Enter withholdings for MRP on the RETIRED PAY tab of the AWARD ADJUSTMENTS screen in VBMS Awards. Never enter withholdings for MRP on the OTHER ADJUSTMENTS tab of the AWARD ADJUSTMENTS screen.

6. CRDP


Introduction

This topic contains information on the concurrent payment of MRP and disability compensation, including
  • history of Special Compensation for Severely Disabled Retirees (SCSD)
  • overview of CRDP
  • application for or election of CRDP
  • effect of CRDP on waived amounts of MRP
  • CRDP rate table
  • timetable for eliminating the offset of MRP
  • example of how DFAS calculated CRDP prior to 2014, and
  • changes that affected Veterans with a total disability rating.

Change Date

September 19, 2019

VI.ii.4.A.6.a. History of SCSD

The Defense Authorization Act of 2000 established the benefit known as Special Compensation for Severely Disabled Retirees (SCSD), effective October 1, 1999. The eligibility criteria for this benefit were liberalized effective October 1, 2001, and February 1, 2002. The benefit was then repealed effective January 1, 2004, and replaced with CRDP. DOW was responsible for administering the SCSD program and paying SCSD. The amount of payment was based on the percent of the VA disability rating, and the payment was taxable. The basic criteria for eligibility are shown in the table below.
Effective DateBasic Eligibility Criteria
October 1, 1999
  • Twenty years of qualifying service (military disability retirees were excluded)
  • SC disability rated 70-percent or more disabling, and
  • 70-percent disability rating within 4 years of military service.
October 1, 2001
  • Twenty years of qualifying service (military disability retirees were included)
  • SC disability rated 70-percent or more disabling, and
  • 70-percent disability rating within 4 years of military service.
February 1, 2002
  • Twenty years of qualifying service (military disability retirees were included)
  • SC disability rated 60-percent or more disabling, and
  • 60-percent disability rating within four years of military service.
January 1, 2004No eligibility (program repealed).
Note: Although CRDP replaced SCSD, this brief history is provided for general information in case reference to SCSD is encountered during routine review of a Veteran’s records.

VI.ii.4.A.6.b. Overview of CRDP

The National Defense Authorization Act of 2004 established CRDP, effective January 1, 2004. DOW is responsible for administering this program, the intended purpose of which was to phase out the offset of MRP for VA disability compensation over a 10-year period. Veterans may qualify for CRDP if they
  • are a military retiree with a combined disability rating of at least 50 percent, and
  • meet one of the following requirements:
    • retired based on length of service (including Veterans that were retired under Temporary Early Retirement Authority)
    • retired based on disability (10 U.S.C. Chapter 61) with at least 20 years of active service, or
    • retired from a Reserve component with 20 qualifying years of service and has reached retirement age. (In most cases, the retirement age for reservists is 60, but some may start receiving MRP prior to age 60 under 10 U.S.C. 12731(f)(2)(A). Those with 20 qualifying years of service who are receiving disability retired pay prior to their retirement age are not entitled to CRDP. They may become eligible for CRDP when they reach their retirement age.)
Notes:
  • Do not automatically assume that the MRP a Veteran with 20 or more years of service receives is based on length of service. Even with 20 or more years of service, a Veteran’s MRP may be based on disability.
  • If a Veteran with 20 or more years of service is receiving MRP based on disability, CRDP is only applicable to that portion of the MRP that is based on length of service. Such a Veteran would not be entitled to full CRDP unless the MRP that is based on length of service is equal to or greater than the MRP that is based on disability.
  • Prior to January 1, 2014, a Veteran in receipt of MRP based on length of service was entitled to CRDP only if the Veteran waived the MRP in order to receive disability compensation. No such requirement currently exists.
  • The requirement to waive MRP was eliminated on January 1, 2005, for Veterans
    • in receipt of MRP based on length of service, and
    • who were rated 100-percent disabled or TDIU due to SC disabilities.
  • Veterans in receipt of MRP based on disability must still waive their MRP before they may receive CRDP.
References: For more information on

VI.ii.4.A.6.c. Application for or Election of CRDP

An application for CRDP is not necessary.
  • RPCs automatically
    • determine the amount of CRDP entitlement, and
    • initiate payment to the Veteran.
  • Concurrent payment of both CRDP and CRSC) may not be made. A Veteran who is eligible for both CRDP and CRSC, may elect either benefit during the election open season.
  • DFAS sends out election information to eligible Veterans each December, while the Coast Guard sends the information in February.

VI.ii.4.A.6.d. Effect of CRDP on Waived Amounts of MRP

CRDP restores some or all of that portion of MRP a Veteran waived in order to receive VA disability compensation. CRDP is subject to all of the same laws and regulations that apply to MRP, including reductions for
  • taxes
  • child support or alimony
  • garnishments, and
  • government debts.

VI.ii.4.A.6.e. CRDP Rate Table

The table below shows the amount of CRDP that DOW credited Veterans against MRP waived.
Combined Disability EvaluationRestored Rate of MRP
100%$750.00
90%$500.00
80%$350.00
70%$250.00
60%$125.00
50%$100.00

VI.ii.4.A.6.f. Timetable for Eliminating the Offset of MRP

Elimination of the offset of MRP for disability compensation was phased in over a period of 10 years. The table below shows the percentage of the offset that DOW restored through CRDP over the 10-year phase-in period.
Effective YearPercent of Restoration
200510.00%
200628.00%
200749.60%
200869.76%
200984.88%
201093.95%
201198.18%
201299.64%
201399.96%
2014100.00%

VI.ii.4.A.6.g. Example of How DFAS Calculated CRDP Prior to 2014

Below is an example of how DFAS calculated CRDP prior to 2014. Situation:
  • A Veteran was entitled to MRP of $1,800.00 in 2006.
  • VA had rated the Veteran 90-percent disabled due to SC disabilities.
  • The Veteran had a spouse but no children.
  • The disability compensation payable in 2006 was $1,557.00.
  • The Veteran waived MRP in the amount of $1,557.00 to receive disability compensation.
Calculations: Using the rate table in M21-1, Part VI, Subpart ii, 4.A.6.e, the waived amount of $1,557.00 was reduced by $500.00, leaving a balance of $1,057.00. The balance of $1,057.00 was multiplied by .28 (28 percent, according to the table in M21-1, Part VI, Subpart ii, 4.A.6.f) resulting in $295.96. This amount was added to the $500.00 from the rate table in M21-1, Part VI, Subpart ii, 4.A.6.e, for a 90-percent disabled Veteran ($295.96 plus $500.00 equals $795.96). Result: The gross CRDP rate payable in 2006 was $795.96. The rate was recalculated each year, until the full amount of the offset was eliminated in 2014.

VI.ii.4.A.6.h. Changes That Affected Veterans With a Total Disability Rating

Effective January 1, 2005, the CRDP phase-in timetable referenced in M21-1, Part VI, Subpart ii, 4.A.6.f no longer applied to Veterans
  • with a schedular, 100-percent disability rating for SC disabilities, or
  • whom VA had rated TDIU under 38 CFR 4.16.
Accordingly, a Veteran retired due to years of service and entitled to CRDP, could receive the full amount of MRP and VA disability compensation from the later of the following dates:
  • January 1, 2005, or
  • the date VA rated the Veteran 100-percent disabled or TDIU.
If a Veteran retired due to disability under 10 U.S.C. Chapter 61, CRDP is subject to an offset for the difference between
  • MRP based on disability, and
  • MRP based on years of service.


7. Concurrent Payment of VA Benefits and CRSC


Introduction

This topic contains information about concurrent payment of VA benefits and CRSC, including
  • overview of CRSC
  • CRSC eligibility criteria
  • definition of qualifying combat-related disability
  • notifying a Veteran with Agent Orange-related disabilities of possible entitlement to CRSC
  • application for CRSC
  • amount payable under CSRC, and
  • coordination with CRSC boards.

Change Date

June 3, 2026

VI.ii.4.A.7.a. Overview of CRSC

CRSC was authorized by the National Defense Authorization Act of 2003, Public Law (PL) 107-314, and became effective June 1, 2003. This benefit was designed to compensate certain Veterans who must waive MRP in order to receive VA disability compensation. CRSC is a monthly benefit DOW pays to eligible military retirees that is separate from MRP. It is not classified as MRP, and it is not taxable. It is, however, subject to garnishment for child support and alimony.

VI.ii.4.A.7.b. CRSC Eligibility Criteria

The eligibility criteria for CRSC
  • were expanded effective January 1, 2004, and January 1, 2008, and
  • are described in the table below.
Note: Eligibility is determined by the Veteran’s service department. VA may need to furnish disability information to a service department, but CRSC is administered and paid by DOW, not VA.
Effective DateEligibility Criteria
June 1, 2003
  • Twenty years active military service for retirement purposes
  • receipt of disability compensation from VA, and
  • qualifying combat-related disability(ies)
    • rated at least 10-percent disabling for which a Purple Heart was awarded, or
    • rated at least 60-percent disabling (alone or in combination with other combat-related disabilities).
January 1, 2004(PL 108-136)
  • Twenty years
    • active military service for retirement purposes, or
    • reserve service for retirement at age 60
  • receipt of disability compensation from VA, and
  • qualifying combat-related disability(ies) that are assigned any compensable disability rating.
January 1, 2008(PL 110-181)
  • Eligible for MRP based on length of service, with no minimum length-of-service requirement (This includes Veterans that were retired under Temporary Early Retirement Authority. It does not include Reserve retirees that received MRP for early retirement with physical disabilities under 10 U.S.C. 12731b.)
  • receipt of disability compensation from VA, and
  • qualifying combat-related disability(ies) that are assigned any compensable disability rating.
Reference: For more information on CRSC, see the Under Secretary of War, Personnel, and Readiness: Military Compensation internet site.

VI.ii.4.A.7.c. Definition: Qualifying Combat-Related Disability

To be eligible for CRSC, a Veteran must have an SC disability that is combat-related. A qualifying combat-related disability, for the purpose of this benefit, is defined in the following table. Important: Military service departments – not VA – are responsible for making the final determination regarding qualifying disabilities.
Nature of DisabilityCharacteristics of This Type of Disability
  • disabilities for which SC is presumed under 38 U.S.C. 1112(a), or
  • posttraumatic stress disorder
The Veteran’s service department must independently determine the relationship between the disability and the qualifying criteria. Note: Service departments are not bound by VA presumption if there is documentary information that the disability is not combat-related.
direct result of armed conflict
  • A disability resulting from a disease or injury incurred in the line of duty as a direct result of armed conflict (Mere service during wartime or participation in combat operations is not sufficient. There must be a causal relationship between the armed conflict and the resulting disability.), or
  • a disability for which VA has awarded compensation based on
    • former prisoner of war status, or
    • exposure to hazardous substances during service, such as
      • Agent Orange
      • radiation
      • mustard gas, or
      • Lewisite.
Note: Such disabilities might include Gulf War undiagnosed illnesses.
incurred while engaged in hazardous serviceA disability that is the direct result of performance of hazardous service that includes, but is not limited to
  • aerial flight
  • parachute duty
  • demolition duty
  • experimental stress duty, and
  • diving duty.
Note: Disabilities incurred during travel to and from hazardous duty are not included.
incurred during the performance of duty under conditions simulating warIn general, this category includes disabilities resulting from military training. Examples: War games, practice alerts, tactical exercises, airborne operations, leadership reaction courses, grenade and live-fire weapons practice, bayonet training, hand-to-hand combat training, repelling, and negotiation of combat confidence and obstacle courses. Disabilities resulting from physical training activities such as the following are not included:
  • calisthenics
  • jogging or formation running, or
  • supervised sport activities.
caused by an instrumentality of warIncurrence of the disability during an actual period of war is not required. However, there must be a direct causal relationship between the disability and the instrumentality of war. An instrumentality of war
  • is a vehicle, vessel, or device designed primarily for military service and intended for use in such service at the time of the occurrence or injury, and
  • might also include instrumentalities not designed primarily for military service if use or occurrence involving such instrumentality subjects the individual to a hazard peculiar to military service.
Example: The disabilities in this category could result from
  • wounds caused by a military weapon
  • accidents involving a military combat vehicle
  • injury or sickness caused by fumes or gases, or
  • explosions of military ordnance, vehicles, or material.

VI.ii.4.A.7.d. Notifying a Veteran With Agent Orange-Related Disabilities of Possible Entitlement to CRSC

Include the following paragraph in a decision notice when
  • VA grants SC for a disability related to a Veteran’s exposure to Agent Orange, and, and
  • the Veteran is eligible for MRP.
You may be entitled to Combat-Related Special Compensation (CRSC) for your service-connected [new Agent Orange disability(ies)]. CRSC provides monthly payments to eligible retired Veterans with combat-related disability(ies), and is a benefit administered by the Department of War. Entitlement to CRSC is not automatic. Accordingly, to receive CRSC for your service-connected [new Agent Orange disability(ies)], you must specifically apply for CRSC for that disability, even if you have already been awarded CRSC for disabilities previously service-connected by VA.

VI.ii.4.A.7.e. Application for CRSC

To apply for CRSC, Veterans must contact their service department. The service department will ask the Veteran to
  • complete DD Form 2860, Claim for Combat-Related Special Compensation (CRSC), and
  • return the form to one of several addresses printed on the form (depending on the Veteran’s branch of service).
Note: Download the DD Form 2860 from the DOW Forms Management Program website.

VI.ii.4.A.7.f. Amount Payable Under CRSC

Generally, the amount payable under CRSC is equal to the amount of compensation VA would pay for the combat-related disability(ies). However, there are circumstances that affect the amount of CRSC that DOW will pay. DOW bases CRSC payments on VA’s disability compensation rates, and payment is supported by legislation found in 38 U.S.C. Chapter 11
  • without the additional allowance for dependents, prior to January 1, 2004, and
  • including SMC for combat-related disabilities and the additional allowance for dependents, effective January 1, 2004.
The actual amount to be paid is determined by DOW, and it is influenced by certain variables. The following table gives a synopsis of issues that may affect the rate of CRSC that is payable.
If VA and service records show ...Then the CRSC rate payable is ...
all compensable SC disabilities are combat-related
  • the amount specified in 38 U.S.C. Chapter 11 for the combined disability rating, but
  • not more than the amount of MRP withheld.
  • the Veteran has a single or multiple SC, combat-related disability(ies) to which VA has assigned at least a 60-percent disability rating, and
  • VA has determined the Veteran is TDIU due to the same SC disability(ies)
  • the amount specified in 38 U.S.C. Chapter 11 for a disability or disabilities rated totally (100-percent) disabling, but
  • not more than the amount of MRP withheld.
the Veteran
  • qualifies for MRP based on any service, as specified in M21-1, Part VI, Subpart ii, 4.A.7.b, but
  • is in receipt of MRP based on disability
as shown in the table below.
Time PeriodCRSC Rate Payable
Prior to January 1, 2013The amount specified in 38 U.S.C. Chapter 11 for the combined disability rating assigned to the Veteran’s combat-related disabilities only, minus the difference between the Veteran’s
  • MRP based on length of service, and
    • the amount specified in 38 U.S.C. Chapter 11 for the combined disability rating assigned to all of the Veteran’s SC disabilities.
January 1, 2013, to the presentThe lesser of the following amounts:
  • the amount specified in 38 U.S.C. Chapter 11 for the combined disability rating assigned to the Veteran’s combat-related disabilities only, or
  • MRP based on length of service minus the difference between
    • MRP based on disability, and
    • the amount specified in 38 U.S.C. Chapter 11 for the combined disability rating assigned to all of the Veteran’s SC disabilities.

Note: CRSC is not payable if MRP based on length of service, minus the difference between MRP based on disability and gross VA disability compensation, equals zero or less.

a reservist
  • has sufficient credits to qualify for retirement, but
  • is not entitled to Reserve retirement pay until
the amount specified in 38 U.S.C. Chapter 11 for the combined disability rating assigned to the combat-related disabilities, effective from the month the Veteran reaches
the Veteran’s SC disabilities include combat-related and noncombat-related disabilitiesthe amount specified in 38 U.S.C. Chapter 11 for the combined disability rating assigned to the combat-related disabilities only.
  • the Veteran is not receiving disability compensation, or
  • the Veteran is not receiving MRP (although eligibility exists) because, for example, the Veteran elected to have time spent in military service credited toward civil service retirement
$0.00. (CRSC is not payable.)
Note: The amount of CRSC entitlement plus any MRP not offset under 38 U.S.C. 5304 and 38 U.S.C. 5305 cannot be greater than the full MRP to which the Veteran is entitled.

VI.ii.4.A.7.g. Coordination With CRSC Boards

CRSC boards are responsible for determining eligibility for CRSC and may contact Compensation Service’s Military Pay (MILPAY) Staff when clarification of VA benefits is required. When necessary, MILPAY Staff will coordinate with appropriate personnel to remedy discrepant data in the corporate record and/or rating decision(s).

Source: VA M21-1 Adjudication Procedures Manual, M21-1, Part VI, Subpart ii, Chapter 4, Section A (U.S. government work, reproduced for reference). Browse all sections →