CRDP and CRSC in a California Military Divorce: What Each Payment Is and How It Affects Property Division

CRDP and CRSC are two different federal payments to disabled military retirees. CRDP restores military retired pay that was once reduced because of VA disability compensation, and California courts have generally treated that restored retired pay as divisible. CRSC is a separate combat-related payment, not retired pay, and DFAS will not pay a former spouse a share of it.

Most people facing this question are sitting with a retiree's pay statement that shows several lines of money, and a divorce that depends on knowing which of those lines belong to the marriage. A retiree in San Diego County may be wondering whether a disability rating shields part of the monthly check. A former spouse may have heard that "disability pay can't be touched" and be trying to work out whether that is true of everything on the statement, or only part of it. The answer turns on what each payment legally is, not on what it is called at the kitchen table.

This article walks through four separate payments: military retired pay, VA disability compensation, CRDP and CRSC. It covers how federal law treats each, what California community property law does with the part it can reach, and what a court order has to say before a former spouse can be paid.

What CRDP and CRSC Are — and Why the Distinction Matters in Divorce

Concurrent Retirement and Disability Pay, or CRDP, is the program that lets certain military retirees receive both their full military retired pay and their VA disability compensation, instead of having retired pay reduced to make room for the disability payment. Under 10 U.S.C. § 1414(a)(1), a "qualified retiree" who is entitled in a month to both retired pay and veterans' disability compensation for a qualifying service-connected disability "is entitled to be paid both for that month," without regard to the federal rules that otherwise bar that double payment. The section defines a qualifying service-connected disability by rating, and it has special rules for members retired for disability under chapter 61 of title 10.

Combat-Related Special Compensation, or CRSC, is a different program. Under 10 U.S.C. § 1413a(a), the Secretary concerned pays an eligible combat-related disabled retiree who elects it "a monthly amount for the combat-related disability of the retiree." That monthly amount is measured by the VA compensation the retiree would receive for combat-related disabilities alone, and it may not exceed the reduction in retired pay that applies to the retiree for that month (10 U.S.C. § 1413a(b)(2)).

Before CRDP existed, a retiree who received VA disability compensation generally had to give up an equal amount of military retired pay. That reduction is commonly called the VA waiver or the disability offset. Both CRDP and CRSC are responses to that offset, which is why people mix them up. They were built differently, though, and the difference carries straight into a divorce.

Four payments can show up in a military retiree's finances, and each one needs to be kept on its own line:

• Military retired pay, paid for years of service.
• VA disability compensation, paid by the Department of Veterans Affairs for service-connected disability.
• CRDP, which restores retired pay that the offset would otherwise remove.
• CRSC, a separate combat-related payment that is not retired pay.

Folding these into one "military pension" is the source of many mistakes in property division. The federal law that sets the boundaries is 10 U.S.C. § 1408, the Uniformed Services Former Spouses' Protection Act, or USFSPA. It decides what kind of state court order the federal government will honor and what pool of money that order can draw from. California law then decides how the part that can be divided is shared between spouses.

The VA Disability Offset and How CRDP Changed It

Under the offset rule, a retiree who chose to receive VA disability compensation waived an equal dollar amount of military retired pay. The total money coming in did not grow. Part of it simply moved from the retired pay column to the disability column.

That shift mattered in divorce because of Mansell v. Mansell, 490 U.S. 581 (1989). In Mansell, the U.S. Supreme Court held that federal law preempts state courts from treating as divisible property the retired pay that a retiree waived in order to receive VA disability compensation. In practical terms, the waived amount was off the table for division in a California divorce, and so is VA disability compensation itself. For a former spouse, this meant that a larger disability rating could shrink the share of retired pay that a court could reach.

CRDP changed the arithmetic for retirees who qualify. When 10 U.S.C. § 1414 lets a qualified retiree receive both payments, the retired pay that used to be waived is paid again as retired pay. Nothing is converted into disability compensation. The VA payment continues on its own track, and the retired pay is restored alongside it.

That is the core reason California courts have generally treated the restored retired pay as part of the divisible retired pay, while VA disability compensation remains outside division under Mansell. This is a general pattern, not an absolute rule, and the specific facts of a retiree's pay, rating and retirement type can change the picture.

The agency at the center of all this is the Defense Finance and Accounting Service, or DFAS. DFAS is the federal agency that processes military pay, including retired pay and direct payments to former spouses under a qualifying court order. A retiree's DFAS statement is often the first place the different payment lines become visible, and it is often the first document a divorcing couple in San Diego County looks at together.

CRSC: Combat-Related Special Compensation and Its Treatment in Divorce

CRSC sits outside the retired pay system entirely. It is a monthly payment for combat-related disability, and the statute ties its maximum to the amount by which retired pay is reduced because of VA compensation (10 U.S.C. § 1413a(b)(2)). In effect, it is paid in place of part of the retired pay the retiree would otherwise have lost, not on top of it.

Because CRSC is a separate benefit rather than retired pay, it is not part of the "disposable retired pay" that a USFSPA order can direct DFAS to pay to a former spouse. A former spouse cannot receive a share of CRSC through DFAS's direct-payment process. That is the clearest practical difference between CRSC and CRDP in a divorce.

A retiree who qualifies for both programs generally has to elect one or the other; they are not received at the same time. The choice is often framed as a financial decision about which program pays the retiree more. In a divorce, the election also affects how much of the money is retired pay, and therefore how much is available for division and for DFAS direct payment. A retiree who moves from CRDP to CRSC may see the share payable to a former spouse change, even though the retiree's own total income looks similar.

CRSC's position outside the USFSPA does not necessarily mean a California court disregards it altogether. A court may look at a party's overall financial circumstances in contexts such as support, where income matters. How that plays out depends on the facts and on the specific issue before the court, and it is not a single fixed rule.

What the USFSPA Actually Authorizes California Courts to Divide

The USFSPA does not hand a former spouse any share of retired pay on its own. A former spouse's share comes from a state court order that divides the retired pay under the governing law, which in a California case is California community property law. Section 1408 recognizes those orders and allows DFAS to honor them. It does not create the entitlement.

The statute defines a qualifying "court order" in detail. Under 10 U.S.C. § 1408(a)(2), the term means "a final decree of divorce, dissolution, annulment, or legal separation issued by a court, or a court ordered, ratified, or approved property settlement incident to such a decree," among other orders. The order must be issued under the laws of the court's jurisdiction, must provide for child support, alimony or a division of property, and, in the case of a property division, must "specifically provide for the payment of an amount, expressed in dollars or as a percentage of disposable retired pay, from the disposable retired pay of a member to the spouse or former spouse of that member" (10 U.S.C. § 1408(a)(2)(C)).

Disposable retired pay, in general terms, is the portion of a member's retired pay that remains after certain deductions federal law requires. It is the pool a property division order draws on, and it is smaller than the gross figure at the top of a retiree's statement. VA disability compensation is not part of it, consistent with Mansell v. Mansell, 490 U.S. 581 (1989). The site's guide to disposable retired pay explains the concept in more depth.

The 10/10 rule is the most misunderstood piece of the USFSPA. It is a federal condition on direct payment: DFAS will pay a former spouse's share of retired pay directly only when the marriage overlapped the member's creditable military service for at least the period federal law requires. It decides only who sends the check. It does not decide whether retired pay can be divided.

When the overlap falls short, a California court can still divide the community share of retired pay. The member then pays the former spouse's share directly, rather than DFAS doing it. The site's explainer on the 10/10 rule covers that distinction on its own.

California's court system publishes general family law procedure through courts.ca.gov and its self-help center at selfhelp.courts.ca.gov. Those resources describe the California side of the process. They do not address DFAS's requirements, which come from federal law.

How California Community Property Rules Apply to Military Retired Pay

Family Code section 760 states the starting rule: "Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property." Military retired pay earned through service during a marriage while the couple was domiciled in California falls within that rule to the extent of that service. Under Family Code section 771(a), earnings and accumulations of a spouse after the date of separation are that spouse's separate property.

Family Code section 2550 then directs the court, except on written agreement, oral stipulation in open court, or as otherwise provided, to divide the community estate equally. For military retired pay, California courts typically find the community share using the time rule, also called the coverture fraction. The numerator is the years of creditable service during the marriage, and the denominator is total years of creditable service; service during the marriage while the couple was domiciled elsewhere can be quasi-community property, which Family Code section 125 defines as property acquired while domiciled elsewhere that would have been community property had the acquiring spouse been domiciled in California. That fraction is applied to the retired pay, and the community share is then divided equally between the spouses. Federal law adds its own wrinkle for members still serving at divorce, discussed in the site's article on the frozen benefit rule.

Because CRDP restores retired pay that the offset previously removed, the restored amount is generally included in the retired pay the time rule is applied to. VA disability compensation is not. CRSC, as a separate payment, is not part of the retired pay either. This is why a retiree's election and disability rating can matter so much to the numbers in a California judgment.

The Survivor Benefit Plan, or SBP, is a separate issue that a judgment needs to address on its own terms. SBP is a federal annuity program that continues payments to a designated beneficiary after the retiree dies. Under 10 U.S.C. § 1450(a), the annuity is paid "effective as of the first day after the death" of the covered person, and an eligible former spouse is one of the possible beneficiaries. The annuity is figured from a "base amount," which 10 U.S.C. § 1447(6) defines differently depending on the kind of annuity: for a standard annuity, it is generally the monthly retired pay the person was entitled to, as that section describes; for a reserve-component annuity, it is the retired pay the person would have been eligible for under the rules in that clause.

California law gives the court tools here. Family Code section 2610(a) directs the court to make the orders needed to ensure each party receives their full community share in any retirement plan, "including all survivor and death benefits," and allows it to order a party to elect a survivor benefit annuity for the other party when a plan provides for that election, provided the court does not order a plan to provide increased benefits based on actuarial value. If retired pay or survivor coverage was left out of a judgment, Family Code section 2556 gives the court continuing jurisdiction to divide an omitted community asset, generally equally.

In San Diego County, these questions are decided by the Superior Court of California, County of San Diego. DFAS's own requirements for payment are published at dfas.mil, which is the authoritative source for how DFAS processes former spouse payments.

Drafting the Court Order: What a Military Retired Pay Division Order Must Include

A court order dividing military retired pay has to satisfy 10 U.S.C. § 1408 for DFAS to honor it. Such an order is sometimes called a military retired pay division order, or a court order acceptable for processing (COAP). It is not a QDRO. A QDRO, or qualified domestic relations order, is the instrument used for civilian retirement plans governed by the federal ERISA statute, and it does not apply to military retired pay.

The order must be a final court order within the meaning of section 1408(a)(2). A private agreement between spouses, by itself, does not qualify. A property settlement counts when it is "court ordered, ratified, or approved" and incident to a decree. In a California case, that usually means the agreement becomes part of a judgment entered by the court.

On the money itself, section 1408(a)(2)(C) requires the order to state the former spouse's share as a dollar amount or as a percentage of disposable retired pay. An order that describes the share loosely, or that measures it against gross retired pay or against payments outside disposable retired pay, can create problems at the processing stage. A share of CRSC cannot be directed to a former spouse through a DFAS payment order at all, because CRSC is not disposable retired pay.

DFAS also requires identifying information about the member, generally including the member's full name, Social Security number and branch of service, and it sets its own submission requirements. DFAS's How to Apply page lists what an application must include. The site's step-by-step guide to a military retirement division order and its explainer on DFAS former spouse payments go further into the order and the payment process.

Common Misconceptions About CRDP, CRSC, and Divorce

"CRDP is just disability pay and cannot be divided." This one comes up often, and it is understandable given the program's name. CRDP restores retired pay that the offset previously removed. It is not VA disability compensation, and California courts have generally treated the restored retired pay as subject to division as community property.

"CRSC works the same way as CRDP in divorce." The two are often mentioned together, but they behave differently. CRSC is a separate combat-related payment under 10 U.S.C. § 1413a, not retired pay. It is not disposable retired pay, and DFAS will not pay a former spouse a share of it directly.

"If the marriage didn't overlap service long enough, retired pay can't be divided." The 10/10 rule controls only whether DFAS pays the former spouse directly. A California court can still divide the community share of retired pay when the overlap is shorter, and the member then pays that share directly.

"A QDRO divides military retired pay." QDROs belong to civilian ERISA plans. Military retired pay is divided through a court order that meets 10 U.S.C. § 1408.

"VA disability compensation can be divided as community property." Mansell v. Mansell, 490 U.S. 581 (1989), holds that federal law preempts state courts from treating as divisible property the retired pay a retiree has waived to receive VA disability compensation, and 38 U.S.C. § 5301 protects VA benefits from assignment and from legal process. It is not divided as community property in a California divorce.

If You'd Like to Talk Through Your Situation

CRDP, CRSC and VA disability compensation can shift the numbers in a military divorce in ways that are hard to see from a pay statement alone. Whether a retiree is receiving CRDP or has elected CRSC, how long the marriage overlapped creditable service while the couple was domiciled in California, and whether survivor coverage was addressed are the facts that usually shape the analysis. A consultation is a place to raise those questions. Military Family Law Advocates practises California family law only, so questions about VA claims or other federal benefit processes belong elsewhere.

To talk with the firm about CRDP and CRSC in a divorce, call Military Family Law Advocates at 888-771-0460 for a confidential consultation.