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CRDP Payment Process
2011/07/18
How much compensation will I receive?
CRDP is being phased-in over a ten-year period that began in 2004. The VA Waiver in your retired pay is being reduced by 10% per year so that by 2014, disabled retirees with 50% or greater VA ratings will be entitled to full military retired pay and VA disability compensation. CRDP cannot be greater than your VA Waiver amount.
How is CRDP paid?
CRDP payees receive two payments. One is your VA compensation and one is your Service retired pay. CRDP is incorporated in your Service retired pay. The CRDP amount is phased-in so as CRDP rises, the VA Waiver amount will decrease. In 2014, when CRDP is fully phased-in, the VA Waiver will go away.
Will CRDP take into account dependent compensation?
Allowances for dependents are included in calculating the amount of increase in retired pay you will receive for that year.
Will CRDP take into account Special Monthly (SMC) compensation?
SMC is included in calculating your overall compensation.
I received a disability retirement from my Military Service after 20 years of active duty. Does this affect my compensation?
You will still be eligible for CRDP but you will probably see some adjustments to the amount you receive. Your Military Service awarded you a medical disability retirement (chapter 61), which probably provides you extra pay for your disability. CRDP restores’ retired pay’ not ‘disability pay.’ So your CRDP is based on the amount of retired pay you receive due to your length of service—longevity. Your CRDP could be less than your total retired pay because your total pay also includes an amount for your disability. By law, you cannot receive two disability pays for the same disability. This would occur if you get disability pay in your Service check and from the VA.
How will my Special Compensation for Certain Severely Disabled Retirees (SCSD) (i.e. "old special compensation") be affected?
SCSD payments were repealed January 1, 2004 since the first increment of concurrent receipt will be bigger than SCSD for all recipients. SCSD was paid to retirees with at least 20 years of Regular service who incurred VA disability ratings of 60% or higher within 4 years after retiring.
Are Reservists and National Guard eligible?
Yes, all Reservists and National Guard receiving longevity retirement--twenty "good years" for retirement purposes—are eligible for CRDP. Grey area retirees become eligible for CRDP at age sixty when they begin to receive retired pay.
Are Temporary Early Retirement Authority (TERA) retirees eligible?
TERA retirees are eligible for CRDP.
Are Chapter 61 retirees (medical retirees) with less than 20 years eligible?
No. MOAA continues to fight for CRDP for medical retirees with less than twenty years. Chapter 61 retirees with less than 20 years may be eligible for CRSC though. For CRSC information see
MOAA's Eligibility Information.
Are surviving spouses eligible?
CRDP does not apply to survivors.
Are former spouses eligible?
CRDP restores retired pay and under the Uniformed Services Former Spouses Protection Act (USFSPA) retired pay is considered marital property subject to division in a divorce. Therefore, former spouses who have been awarded a portion of the service member’s retired pay should receive an increase in the portion as the member’s retired pay is increased under CRDP.
When will my compensation begin?
CRDP is automatically added to the monthly retired paychecks of eligible retirees. If you have not yet received CRDP, you may wish to contact the Defense Finance Accounting Service (DFAS) at their toll-free number (800) 321-1080.
Will the pay be retroactive?
All compensation will be retroactive to the date you became eligible for CRDP. Retroactive payments for CRDP can be retroactive back to January 1, 2004.
Is the compensation taxable?
CRDP payments are taxable according to your current retired pay Federal Income Tax Withholding (FITW) tax rate and may affect the amount you wish to have deducted for State Income Tax Withholding (SITW).
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