9157 / What types of disability benefits are available to retired servicemembers?

Some retirees from the armed services also receive compensation from the Veterans Affairs Administration for disabilities related to their military service along with traditional retirement pay. There are a variety of service-related disability programs within the VA system, but the scope of this paper will cover those that coincide with traditional retirement pay.Historically, a retiree’s monthly pension benefit was docked by the amount the veteran received in service-related disability pay by the VA.¹ This was referred to as the VA waiver program.² The premise of the VA waiver program was that receiving pay for a disability incurred during military service and receiving retirement pay for military service was a prohibited form of double-dipping from government compensation. The phaseout of that aspect of the VA waiver program began in 2004, and it was completely phased out in 2014.

There are two primary systems that disabled retirees can use to receive their full retirement defined benefit as well as VA disability pay concurrently. The first system is the Concurrent Retirement and Disability Pay (CRDP) program, and the other system is the Combat-Related Special Compensation (CRSC) program. The programs have several similarities, and veterans can qualify for both, but they may only participate in one.³

As the names indicate, CRDP allows retirees who receive both traditional retirement pay and VA disability pay at the same time. To be eligible for the program, a veteran must be eligible to receive traditional retirement pay from his or her branch of service. Additionally, the veteran must be rated as 50 percent or more disabled by the VA.⁴ If a veteran is eligible for only CRDP, then he or she will be automatically enrolled in the program. If a veteran is eligible for both, then he or she must select which program to participate in.⁵