What is Combat Related Special Compensation & the Importance to Retired Reservists

Combat-Related Special Compensation (CRSC) provides tax-free payments to retired Veterans (and Retired Reservists) with combat-related disabilities. You must apply for CRSC through your uniformed service. A VA disability decision based on Agent Orange exposure qualifies for CRSC because AO is considered "an instrumentality of war."

Eligibility for Combat-Related Special Compensation:

All of these must be true:

• You’re retired (and entitled to or receiving military retirement pay), and
• You have a VA disability rating of at least 10%, and
• You currently have your DoD retirement payments reduced by the amount of your VA disability payments

To qualify, one of these must be true:

• You had 20 or more years of service in the military, National Guard, or Reserve, or
• You retired for medical reasons with a disability rating of at least 30% (under Chapter 61), or
• You’re covered under the Temporary Early Retirement Act (TERA), or
• You’re on the Temporary Disability Retired List (TDRL), or
• You’re on the Permanent Disability Retired List (PDRL)

Evidence and other documents you’ll need to provide:

Evidence like this that proves your disability or injuries are the result of a combat-related event:

• Service medical records. These must be from when your injury happened. They must show the severity of your medical condition and that it’s combat-related.
  Note: Provide only relevant medical records. Please don’t send us all your medical records.
• Official service records. These include After Action Reports, Investigative Reports, personnel action requests (like DA 4187), and performance evaluations (like NCOERs and OERs), flight orders, AF Form 603
• Decorations and award recommendations. These include Purple Heart citations, Combat Action Badges, medals, and decorations for valor.

Other documents:

• Retirement records. These include retirement orders and the Armed Forces of the United States Report of Transfer.
• Your VA decision notice
• Your DD214

What the evidence must show about your combat-related disability

The evidence must show that your injury happened while you were:

• Engaged in armed conflict (in combat or during an occupation or raid), or 
• Engaged in hazardous duty (like demolition, flying, or parachuting), or
• Participating in war simulation activities (like live fire weapons practice or hand-to-hand combat training), or
• Exposed to instruments of war (like a military vehicle, weapon, or chemical agent such as Agent Orange), or
• Engaged in an activity you received a Purple Heart for

How to request the documents you need

Decision notice: Send us a request in the form of a letter or note. Unless you have kept a copy, be sure to ask for “my VA rating decision letter,” and sign your name. Send your request to your nearest VA regional office.

Find your nearest VA regional office

New legislation eliminates SBP-DIC annuity offset for eligible surviving spouses

     Congress included a phased elimination of the SBP-DIC offset in the 2020 National Defense Authorization Act, titled "Phase-Out of Reduction of Survivor Benefit Plan Survivor Annuities by Amount of Dependency and Indemnity Compensation."
     Defense Finance and Accounting Service officials have a new webpage called “SBP-DIC News” where they will post information on the status of the implementation of this new law. Officials are working on analyzing the change and making plans for the implementation. They will not be able to answer questions about the full effect of this change in the law until they obtain legal interpretation of the changes and identify all of the impacts on policy and procedures.
     Based on the NDAA, spouse SBP annuitants will see the first change in the SBP annuity payment they receive Feb. 1, 2021. Spouses do not need to notify DFAS that their SBP payment is affected by this change in the law. DFAS officials advise that the most important action SBP annuitants can take at this time is to ensure their annuity account information is up-to-date and includes their correct mailing address so DFAS can contact them, if needed. Also, if annuitants are not using myPay online, they can set up a profile now and add their email address. To create an online myPay account, visit https://mypay.dfas.mil/ and click on “Start here” next to the Create your myPay Profile heading on the lower right-hand side of the page. DFAS officials are unable to provide individual estimates of the upcoming changes in spouse SBP annuity payments because of this change in the law.
     Officials ask SBP annuitants not to call the DFAS Customer Care Center to request an individual estimate. The webpage also states that spouse annuitants who previously received a refund of SBP premiums paid because of the SBP-DIC offset won’t need to pay back that refund because of this change in the law.
     The "Repeal of Authority for Optional Annuity for Dependent Children" and "Restoration of Eligibility for Previously Eligible Spouses" in the NDAA only affect those spouses and children of service members who died on active duty when the surviving spouse previously elected to transfer the SBP annuity to a child or children. It does not affect previous or future SBP elections by retirees or SBP annuities for a retiree's beneficiaries.
     SBP provides a monthly income to eligible survivors of Airmen upon their death while DIC is paid to survivors of Airmen who die from a service-related injury or illness.