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Updated Jul 29, 2024

In This Section

This section contains the following topics:

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

Change Date

July 12, 2022

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:
  • Election of MRP or VA benefits may be made under the provisions of 38 CFR 3.750.  An election is not required in current-law pension cases.  The MRP counts as income.
  • The restriction on concurrent payment includes the additional benefit payable for dependents and
    • special monthly compensation (SMC), or
    • special monthly pension.
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 Defense (DoD) paid between September 11, 2001, and September 30, 2009, is not considered MRP.  Accordingly, there is no restriction on concurrent payment.
Reference:  For more information on the concurrent payment of disability compensation and MRP, see

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 so much of their MRP or retainer pay as is equal to the amount of disability compensation, Section 306 Pension, or Old Law Pension to which they are entitled.
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:
  • DD Form 214, Certificate of Uniformed Service, or other reports of separation, to include PHS Form 1867, Statement of Service
  • VA Form 21-526, Veteran’s Application for Compensation or Pension
  • VA Form 21-526c, Pre-Discharge Compensation Claim
  • Beneficiary Identification and Records Locator Subsystem (BIRLS) MISCELLANEOUS INFO screen, and/or
  • Veterans Information Solution (VIS).
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.
Note:  VA discontinued the use of
  • VA Form 21-526 on February 19, 2019, and
  • VA Form 21-526c on May 1, 2019.
References:  For more information on

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 BIRLS MISCELLANEOUS INFO screen in Share.  This screen displays the MRP rate for the current and previous year.
If the Veteran was recently discharged, or MRP information is not available in Share,
  • call Defense Finance and Accounting Service (DFAS) by dialing 1-800-321-1080 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
  • select the DFAS PAYMENTS tab in VIS to view MRP information for all uniformed service retirees, including the 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

Change Date

July 12, 2022

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

Veterans entitled to MRP must waive their MRP in order to receive disability compensation.
Exception:  Per 10 U.S.C. 141438 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, or VA 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 the date VA rescinded them 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

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.1 when VA
  • receives from the Veteran or their fiduciary
    • any of the following forms constituting an election or waiver:
    • a signed statement constituting an election or waiver, and
  • establishes the Veteran’s entitlement to disability compensation.
Notes:
  • Do not defer award action pending confirmation from the RPC of a waiver of MRP.
  • 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 the date VA discontinued them 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.f.  Determining Whether a Veteran is Eligible for Full CRDP

Veterans are eligible for full CRDP if
  • they are retired for any reason other than disability
  • VA paid disability compensation to the Veteran 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
  • the Veteran has not established eligibility for Combat-Related Special Compensation (CRSC).

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

After determining a waiver of MRP is not required because a Veteran is eligible for full CRDP, claims processors must upload into the Veteran’s electronic claims folder (eFolder) 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 Requirement
Documentation
The Veteran is retired for any reason other than disability.
Screenshot of the
  • MILITARY HISTORY segment in VIS that displays AB, or C in the column labeled Ret Type
  • DFAS/CG PAYMENTS screen in VIS that displays AB, 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:  1201120212041205, 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 or 785-339-2200.
    • 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.
Reference:  For more information on using RCPS, see M21-1, Part VI, Subpart ii, 4.B.3.

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

Change Date

September 19, 2019

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 their 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 21-526, with Block 25 marked
      • VA Form 21-526c, with Block 19 marked, or
      • 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.
Step
Action
Reference
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.
2
Notify the Veteran of the determination made on the claim.
3
Inform the Veteran of the restriction of concurrent payments of VA benefits and MRP and how to elect VA compensation.
4
Inform the Veteran of the effective date for the VA benefit payments if a waiver is received.
5
Inform the Veteran of the effect that the recoupment of readjustment or separation pay has on VA’s offset of benefits for MRP, if necessary.
6
Inform the Veteran of eligibility for ancillary benefits.
7
If the rating activity has determined that a review examination is necessary, maintain a future diary for the examination.
 
Notes:
  • The instructions in this and the other blocks in Topic 3 apply only to initial awards of disability compensation.  They do not apply to cases in which
    • VA has already determined entitlement to disability compensation, and
    • the Veteran has already elected MRP or disability compensation.
  • Follow the instructions in M21-1, Part VI, Subpart ii, 4.B.5.c if a Veteran to whom VA has already awarded disability compensation marks one of the blocks on the forms referenced in the opening paragraph of this block.
  • 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 the date VA discontinued them 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.3.b. Notifying a Veteran Who Elected to Receive MRP of the Determinations VA Made on Their Claim

If VA denies a Veteran’s claim because they elected MRP instead of disability compensation, send a locally-generated letter to inform 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,
  • furnish the Veteran with VA Form 21-651, per 38 U.S.C. 5304(a) and 5305, and
  • inform the Veteran that
    • VA must deny the claim until VA receives the enclosed VA Form 21-651, because there is a statutory restriction on concurrent payments of disability compensation and the full amount of MRP, and
    • if VA receives VA Form 21-651 within one year of the date of the decision notice, VA will grant entitlement to benefits from the effective date shown in the decision notice, as if VA had not denied the claim, with payments subject to withholding until the Veteran’s service department makes corresponding adjustments to MRP.

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

If Veterans waive a portion of their MRP, the full rate of disability compensation will begin as of the effective date of the reduction of their 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 Their 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 their 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 their eligibility for

VI.ii.4.A.3.h. Control Requirement for a Review Examination When Benefits Are Not Paid

It is necessary to control future review examinations in a case in which monetary benefits are not being paid for compensable disability ratings, that is, a case in which MRP has not been waived.
Rationale:  The protective provisions of 38 U.S.C. 110 and 38 CFR 3.951 do not require a concurrent award of monetary benefits.
Note:  See VAOPGCPREC 5-1995 for discussion of a situation in which the protection of 38 U.S.C. 110 does not apply.

VI.ii.4.A.3.i. Establishing the Control for a Review Examination When Benefits Are Not Paid

If the rating activity determines that a review examination is necessary on a claim in which no monetary benefits are paid, follow the procedures in M21-1, Part IV, Subpart ii, 1.B.1.b or c for establishing control for a future review examination.
References:  For more information on
  • scheduling a future review examination, see 38 CFR 3.327(b)(1), and
  • establishing control for a future review examination in

VI.ii.4.A.3.j. Notifying Insurance Service After Denying a Veteran’s Claim Because They Elected to Receive MRP

After denying a Veteran’s claim because they 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

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 3.276(a).
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

Change Date

March 4, 2019

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.
Step
Action
1
Refer 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.
2
Does 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.
Note:  The fiduciary hub of jurisdiction is responsible for completing all final ratings of incompetency with the following exceptions:
  • The Veterans Service Center (VSC) that is co-located with the fiduciary hub of jurisdiction is responsible for completing the final rating of incompetency if, within 60 days of the date the Veteran received notice of the proposed rating of incompetency, they
    • submit additional evidence, or
    • request a hearing.
  • The VSC or pension management center identified in M21-1, Part X, Subpart i, 3.A.2.a is responsible for completing the final rating of incompetency for Veterans residing in a foreign country.
  • Integrated Disability Evaluation System disability rating activity sites (DRASs) and restricted-access claim centers (RACCs) are responsible for completing final ratings of incompetency for cases within their respective jurisdictions.
References:  For more information on
3
Did a fiduciary hub complete the final VA rating of incompetency?
4
Did the fiduciary hub recognize the same fiduciary as the service department?

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 beneficiary
a 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 trustee
elect 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 trustee
not 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 They Will Accept 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.Bwithout 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

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.
DoD 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 Date
Basic 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, 2004
No 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.  DoD 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 to which a Veteran was entitled, and
    • initiate payment to the Veteran.
  • Concurrent payment of both CRDP and CRSC) may not be made.  If a Veteran is eligible for both CRDP and CRSC, they 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 DoD credited Veterans against the MRP they had waived.
Combined Disability Evaluation
Restored 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 DoD restored through CRDP over the 10-year phase-in period.
Effective Year
Percent of Restoration
2005
10.00%
2006
28.00%
2007
49.60%
2008
69.76%
2009
84.88%
2010
93.95%
2011
98.18%
2012
99.64%
2013
99.96%
2014
100.00%

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 so she could 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, if such Veterans retired due to years of service and were entitled to CRDP, they 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

Change Date

July 29, 2024

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 DoD 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 DoD, not VA.
Effective Date
Eligibility 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 Defense, 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 Disability
Characteristics of This Type of Disability
  • disabilities for which SC is presumed under 38 U.S.C. 1112(a), or
  • post-traumatic 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 service
A 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 war
In 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 war
Incurrence 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 Defense.  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

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 DoD will pay.
DoD 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 DoD, 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
as shown in the table below.
Time Period
CRSC Rate Payable
Prior to January 1, 2013
The 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 present
The 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 disabilities
the 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.  RO Liaison With CRSC Boards

CRSC boards are responsible for determining eligibility for CRSC.  In order to make a determination, these boards occasionally require
Each RO is responsible for designating an employee (the RO’s Military Records Specialist (MRS)) to serve as a liaison with CRSC boards.  MRSs are responsible for responding to requests from CRSC boards.

VI.ii.4.A.7.h.  Controlling CRSC Board Requests and Taking Work Credit for Responding

MRSs use end product (EP) 502 to control requests from CRSC boards and clear the EP for work credit after responding to a request.

VI.ii.4.A.7.i.  CRSC Board Requests for Records in VA’s Possession

CRSC boards may request copies of the following from VA:
  • service treatment records (STRs)
  • rating decisions, and/or
  • rating Codesheets.
CRSC boards e-mail their requests to the mailbox (VAVBAWAS/CO/MILPAY) of Compensation Service’s Military Pay (MILPAY) Staff.  This staff then routes the request to the appropriate MRS.  Upon receipt of such a request, the MRS
  • verifies the accuracy of the rating data on the RATING INFORMATION tab and ADDITIONAL RATING DECISIONS tab on the CORPORATE AWARD AND RATING DATA screen in Share
  • initiates action to correct any inaccurate rating data, which might include asking the rating activity to make corrections by backfilling, and
  • follows the instructions in the table below.
If …
And …
Then …
a CRSC board requests a copy of a Veteran’s STRs
an electronic copy of the STRs is not available in the Veteran’s eFolder
  • fax copies or mail photocopies of the STRs to the CRSC board within 10 business days, and
  • provide the following in an e-mail to VAVBAWAS/CO/MILPAY:
    • the date the STRs were faxed to the CRSC board, or
    • the date photocopies of the STRs were mailed to the CRSC board, and the
      • name of the carrier, and
      • corresponding tracking number.
an electronic copy of the STRs is available in the Veteran’s eFolder
  • download and print the STRs
  • fax or mail a copy of the STRs to the CRSC board within 10 business days, and
  • provide the following in an e-mail to VAVBAWAS/CO/MILPAY:
    • the date the STRs were faxed to the CRSC board, or
    • the date photocopies of the STRs were mailed to the CRSC board, and the
      • name of the carrier, and
      • corresponding tracking number.
a CRSC board requests a copy of a Veteran’s rating decision and/or Codesheet
an electronic copy of the rating decision/Codesheet is not available in the Veteran’s eFolder
  • convert the hard copy of the rating decision/Codesheet (by scanning it) into a portable document file (PDF)
  • protect the PDF with a password
  • send the password in an unencrypted e-mail to the CRSC board that requested the rating decision/Codesheet, and
  • send a second unencrypted e-mail, with the password-protected PDF attached, to the same CRSC board.
Important:
  • Complete the actions described in the bullets above within 10 business days.
  • When sending e-mails to a CRSC board, send a carbon copy (cc) to VAVBAWAS/CO/MILPAY.
an electronic copy of the rating decision/Codesheet is available in the Veteran’s eFolder
  • save a copy of the rating decision/Codesheet as a password-protected document
  • send the password in an unencrypted e-mail to the CRSC board that requested the rating decision/Codesheet, and
  • send a second unencrypted e-mail, with the password-protected document attached, to the same CRSC board.
Important:
  • Complete the actions described in the bullets above within 10 business days.
  • When sending e-mails to a CRSC board, send a cc to VAVBAWAS/CO/MILPAY.
the records a CRSC board requests are not available in the Veteran’s eFolder
VA has not yet converted (through scanning) the Veteran’s paper claims folder to an electronic format
  • the Veteran’s paper claims folder is lost, and
  • reconstruction of the paper claims folder does not result in retrieval of the record(s) the CRSC board requested
e-mail notice to VAVBAWAS/CO/MILPAY that the record(s) the CRSC board requested are unavailable because the Veteran’s paper claims folder is lost.

VI.ii.4.A.7.j. Definition:  Discrepant Data

Discrepant data is any data that contradicts information
  • displayed on the AWARD INFORMATION or RATING INFORMATION screens in Share, or
  • contained in the rating Codesheet, rating Narrative, and/or rating decision.

VI.ii.4.A.7.k.  Responsibilities of ROs and Compensation Service’s MILPAY Staff With Regard to Handling CRSC Board Requests for Clarification of Discrepant Data

The table below describes the responsibilities of ROs and the MILPAY Staff with regard to handling requests from a CRSC board for clarification of discrepant data.
Stage
Description
1
The MILPAY Staff determines whether the discrepant data the CRSC board identified is the result of an error on VA’s part.
2
  • If the discrepant data is not the result of an error,
    • the staff explains its findings and conclusion to the CRSC board that requested clarification, and
    • the process ends here.
  • If discrepant data does represent an error on VA’s part, the staff asks the Veterans Benefits Administration’s Office of Field Operations (OFO) to notify the RO with custody of or jurisdiction over the corresponding Veteran’s claims folder of the need for corrective action.
3
The RO referenced in Stage 2 takes corrective action within the time limits shown in the table below.
If the discrepancy involves an error …
Then the time limit for taking corrective action is …
in a rating decision (to include the Codesheet and/or Narrative)
15 days.
of any other type, such as missing diagnostic codes, incorrect diagnostic codes, or an incorrect combined disability rating
10 days.

VI.ii.4.A.7.l. Process for Taking Corrective Action to Resolve Discrepant Data

The table below describes the process ROs must follow upon receipt of notice from the MILPAY Staff (through OFO) that corrective action is required to resolve discrepant data identified by a CRSC board.
If the Veteran has …
Then …
an eFolder only
the RO must follow the process described in the table below.
Stage
Description
1
The MRS sends an e-mail to the team that is responsible for taking corrective action.
  • The subject line of the e-mail must read Corrective Action Required-CRSC.
  • The MRS must describe in the body of the e-mail
    • the error that requires correction, and
    • the date by which the team must complete the corrective action.
Reference:  For more information on the time limits for taking corrective action, see M21-1, Part VI, Subpart ii, 4.A.7.k.
2
After the team completes the corrective action, the team notifies the MRS by e-mail.
3
After receiving the e-mail, the MRS confirms corrective action was properly taken.
4
The RO notifies OFO that corrective action is complete.
5
OFO notifies the MILPAY Staff that corrective action to resolve the discrepant data has been taken.
a paper claims folder
the RO must follow the process described in the table below.
Stage
Description
1
The MRS completes and attaches the folder flash displayed in M21-1, Part III, Subpart v, 4.A.7.m to the claims folder.
2
The MRS hand-carries the claims folder to the team that is responsible for taking the corrective action.
3
After the team completes the corrective action, the team hand-carries the claims folder to the MRS.
4
The MRS
  • confirms corrective action was properly taken, and
  • removes the flash from the claims folder.
5
The RO notifies OFO that corrective action is complete.
6
OFO notifies the MILPAY Staff that corrective action to resolve the discrepant data has been taken.

VI.ii.4.A.7.m. Flagging Cases That Require Corrective Action to Resolve Discrepant Data

When corrective action is necessary to resolve discrepant data, and the Veteran who is the subject of the CRSC board request for clarification has a paper claims folder, the MRS overseeing the corrective action must attach the folder flash shown below to the front of the claims folder.

Combat-Related Special Compensation Board Case

BRANCH:________________
This case has been assigned to the __________Team for
CORRECTIVE ACTION
Once all action is completed,
HAND-CARRY CLAIMS FOLDER TO:
_______________________________
Military Records Specialist/CRSC Liaison
SUSPENSE DATE:
_______________________________
THANK YOU