Understanding the VA Disability Offset and Current Law

Right now, most veterans who receive both military retirement pay and VA disability compensation face an offset. This means your retirement pay is reduced by the amount of your VA disability payment, unless you qualify for Concurrent Retirement and Disability Pay (CRDP) or Combat-Related Special Compensation (CRSC) under 10 U.S.C. § 1414 and § 1413a. Only retirees with a VA disability rating of 50% or higher currently receive both payments in full.

For many retirees, this offset can mean losing out on hundreds or even thousands of dollars each month. The VA disability compensation is tax-free, but the reduction in taxable retirement pay still impacts your total income. You can read more about how these rules work on our military retirement hub and VA claims hub.

What the New House Bill Proposes

The House bill introduced in October 2026 would expand eligibility for concurrent receipt. If passed, it would allow all military retirees with a VA disability rating—regardless of percentage—to receive both their full retirement pension and full VA disability compensation, with no offset. This change would remove the current requirement of a minimum 50% disability rating for CRDP.

For example, a retiree with a 30% VA disability rating and a $2,000 monthly pension would no longer see their retirement pay reduced by their VA compensation. This could mean an increase of $500 or more per month, depending on your rating and years of service. For the latest updates, check our topic explainers index.

Who Would Benefit If the Bill Passes?

This bill would primarily help retirees with VA disability ratings below 50%, who are currently subject to the offset. It would also benefit those with non-combat-related disabilities, who do not qualify for CRSC. According to VA and DoD data, tens of thousands of retirees could see higher monthly income if this legislation becomes law.

Survivors and families may also benefit, since higher retirement pay can impact Survivor Benefit Plan (SBP) annuities and other benefits. For a personalized estimate, use our VA disability rating calculator.

What Veterans and Families Should Do Now

  • Monitor the bill’s progress: Track updates through the House Armed Services Committee and veteran service organizations.
  • Review your current benefits: Check your VA disability rating and retirement pay statements. If you’re unsure about your offset, contact DFAS or your retirement services office.
  • Prepare documentation: Make sure your VA claims are up to date. If you think your rating should be higher, consider filing for an increase using VA Form 21-526EZ.
  • Advocate if you’re affected: Contact your representatives to share how the offset impacts your family. Lawmakers often consider constituent stories during debate.

For more on how to file or appeal VA claims, visit our VA claims hub.

Potential Timeline and Next Steps

If the House bill passes, the changes would likely take effect in the next fiscal year. Veterans should watch for implementation guidance from the VA and Defense Finance and Accounting Service (DFAS). Updates will be posted on official VA and DFAS websites, as well as through major veteran organizations.

In the meantime, keep copies of your disability award letters, retirement orders, and recent pay statements. These documents will help you quickly verify eligibility and ensure you receive any new or increased payments if the law changes.