We’ll see if I can word this correctly. My question is when would CRSC be more beneficial than CRDP? So for example, if you’re rated 100% VA and DoD, qualify for disability and regular retirement (20 years active duty Army) and proposed CRSC of 100%. At what point or percentage of CRSC would it be more beneficial to elect CRDP? Would the main benefit of CRSC be that it is tax exempt?
CRSC vs CRDP-Which is more beneficial?
- Thread starter CrustyGrunt
- Start date
Chapter 61 retiree...eligible for CRDP and CRSC
CRSC is nontaxable. CRDP is taxable.
With CRDP: One receives restoration of waived retired pay at the longevity portion of retired pay amount.
With CRSC: One receives replacement of waived retired pay at the lesser of:
a. The amount of waived retired pay
b. The amount for the CRSC percentage approved; amount found in VA compensation tables
c. The amount of the longevity portion of retired pay
My own rule of thumb:
Take CRSC if the approved percentage is equal to the VA disability percentage
Take CRDP if the approved percentage of CRSC is less than the VA disability percentage
I once took CRSC even though it was less than the CRDP. I had substantial other income and the tax break of CRSC made it attractive even though I got less money from DFAS.
In other words, I received more net overall income even though CRDP would have paid more from DFAS.
Ron
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Got it. Good rule of thumb, as always much appreciated Ron.