Combat-Related Special Compensation (CRSC) for New York Veterans

To qualify for CRSC, you must meet all of the following federal requirements established under 10 U.S.C. § 1413:

First, you must have a service-connected disability rated at least 50% disabling by the VA. This rating comes from a VA disability rating decision that recognizes your condition as service-connected. The disability must have resulted from a combat-related injury or disease—meaning it occurred as a result of armed conflict or from an instrumentality of war. Examples include combat injuries sustained in Iraq, Afghanistan, Vietnam, or other designated combat zones, as well as presumptive conditions recognized by VA regulation for specific service locations and time periods.

Second, you must have received a medical discharge, or you must be medically retired, or your condition must have resulted in a discharge for convenience or other service circumstances. Some veterans who separated with an honorable or general discharge and later developed a service-connected disability rated 50% or higher also qualify. Your discharge must have been under honorable conditions—dishonorable discharge, bad conduct discharge, or disqualifying other-than-honorable discharge bars CRSC eligibility.

Third, you must have been involuntarily separated from active duty, or you must meet specific retirement criteria. The law intends CRSC to compensate those who cannot collect both military retirement and VA disability. If you are currently receiving military retirement pay, you must waive that retirement to receive CRSC; you cannot receive both simultaneously under current law (5 U.S.C. § 5304).

There are no income or asset limits for CRSC. The benefit is not needs-tested. Surviving spouses and dependent children do not receive CRSC directly; CRSC terminates upon your death, though your surviving family may be eligible for Dependency and Indemnity Compensation (DIC) through the VA if your service-connected condition caused your death.

CRSC payment amounts for 2024 are based on your VA disability rating and are adjusted annually for Cost of Living Adjustments (COLA). As of January 2024, the monthly rates are as follows:

50% Disability Rating: $225.90 per month 60% Disability Rating: $271.08 per month 70% Disability Rating: $373.48 per month 80% Disability Rating: $431.72 per month 90% Disability Rating: $471.10 per month 100% Disability Rating: $516.23 per month

These amounts are tax-free income. They are paid in addition to your VA disability compensation (if you are not a military retiree). If you are a military retiree receiving CRSC, your military retirement payment is waived dollar-for-dollar by the CRSC amount, so your total monthly payment equals the higher of the two benefits.

COLA adjustments are applied each January. The 2024 COLA was 3.2% compared to 2023 rates. Check the Department of Defense CRSC website or your latest payment statement for the most current rates, as they change annually.

New York does not provide a separate or supplemental state CRSC benefit. CRSC is a purely federal program administered by the Department of Defense, not the states. There is no state-level Combat-Related Special Compensation program in New York.

However, New York does offer other significant state veteran benefits that may complement your federal CRSC income. For example, New York provides property tax exemptions for veterans with service-connected disabilities rated 50% or higher (NY CPLR § 425-a). Additionally, New York offers a real property tax credit for combat veterans who have received the Combat Veterans Credit (NY Tax Law § 606). These state benefits stack with CRSC—they reduce your property tax liability independently of your federal CRSC payment.

New York also provides free health insurance premium assistance through the Health Insurance Premium Payment (HIPP) program for eligible low-income veterans, which may help offset healthcare costs that CRSC does not address. The state operates county veterans service offices throughout New York that can help you identify which state benefits you qualify for based on your CRSC status and other service history.

Because CRSC is federal-only, you cannot appeal a CRSC denial to New York—all appeals go through the Department of Defense or the VA. However, New York's county veterans service officers can assist you in preparing your initial CRSC application and understanding how to coordinate it with state benefits you may also qualify for.

CRSC claims are denied most frequently for the following reasons:

First, the disability was not rated as service-connected at 50% or higher by the VA. CRSC requires a current VA disability rating decision showing at least 50% disability. If your rating is below 50%, you are ineligible regardless of other factors. Denial letter will state your rating does not meet the threshold. To overcome this, you must first appeal your VA disability rating through the VA appeals process (separate from CRSC) to increase your rating to 50% or higher, then reapply for CRSC.

Second, the disability was not caused by combat-related injury or disease. You must submit medical evidence explicitly linking your diagnosed condition to combat operations, enemy action, or an instrumentality of war. CRSC does not cover service-connected disabilities from non-combat causes (e.g., training accident, motor vehicle accident while stateside, or occupational disease not connected to combat operations). Build a stronger claim by obtaining a nexus letter from a VA-accredited physician explicitly stating that your condition resulted from combat-related incident, and include detailed descriptions of the combat event, location, and date in your application.

Third, your discharge was not honorable or was below honorable conditions. Dishonorable discharge, bad conduct discharge, or other-than-honorable (OTH) discharge bars CRSC eligibility. If you received an OTH or lower discharge and believe it was unjust, you may petition the relevant military branch's Discharge Review Board before you reapply for CRSC.

Fourth, missing or incomplete documentation. The DoD CRSC office denies claims when the DD-214, current VA rating decision, or proof of honorable discharge is missing. Before submitting, verify all documents are recent (VA rating decision should be dated within the last 5 years), legible, and include your full name, Social Security number, and dates. Submit copies, not originals, and keep copies for your records.

CRSC appeals follow a unique process because CRSC is administered by the Department of Defense, not the VA. If your CRSC application is denied, you do not use the three VA appeal lanes (Supplemental Claim, Higher-Level Review, Board of Veterans' Appeals). Instead, you appeal directly to the Department of Defense.

To appeal a CRSC denial, you have one year from the date of the denial letter to file a written appeal with DFAS. Submit your appeal letter and additional evidence to: Defense Finance and Accounting Service (DFAS), CRSC Appeals, 8899 E. 56th Street, Indianapolis, IN 46249-1200. Include your name, Social Security number, the reason for appeal, and new evidence supporting your claim (e.g., additional medical records, statements from witnesses to the combat incident, or a more detailed nexus letter from a VA physician).

DFAS will issue a supplemental denial or reversal decision within 120 days of receiving your appeal. If denied again, you may request reconsideration once more in writing within one year, but there is no CRSC equivalent to the VA Board of Veterans' Appeals. After exhausting DoD administrative review, your only further remedy is filing a lawsuit in federal court under the Administrative Procedure Act, which is rare and requires legal counsel.

If your CRSC denial is based on your VA disability rating being below 50%, you should simultaneously file a VA Supplemental Claim or Higher-Level Review with the VA to increase your rating. Once your VA rating reaches 50%, resubmit your CRSC application to DoD; you do not need to wait for a full CRSC appeal to be denied first. Free help with appeals is available through your county veterans service office or through accredited VA representatives and VSOs listed at https://www.va.gov/vso/.