All gave some, some gave all. It is a quotation popularly attributed to Howard William Osterkamp, who served in combat in Korea from 1951 to 1953. Combat-related disabilities are lifelong reminders of sacrifice. Does a veteran receiving Combat-Related Special Compensation (CRSC) have to share it in Virginia divorce?

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What is CRSC?

The United States Congress created Combat-Related Special Compensation, or CRSC, on December 2, 2002 to restore military retired pay to eligible retired veterans with Service Connected Disabilities that have been determined to be combat related.

In retirement, disabled veterans receiving Veterans Administration (VA) compensation could have had part of their retirement pay withheld, if not for CRSC.

Who Can Receive CRSC?

The Veterans Administration lays out two sets of requirements for a service member to receive CRSC. All of these must be true:

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

Additionally, 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 are covered under the Temporary Early Retirement Act (TERA), or
  • You are on the Temporary Disability Retired List (TDRL), or
  • You are on the Permanent Disability Retired List (PDRL)

If you are receiving CRSC you demonstrated your disability was connected to combat through one or more of these:

  • Service medical records — these must be from when your injury happened, must show the severity of your medical condition, and indicate that the injury is combat-related
  • Official service records — Items like After Action Reports, Investigative Reports, personnel action requests (like DA 4187), and performance evaluations, such as Non-commissioned Officer Evaluation Reports (NCOERs) and Officer Evaluation Reports (OERs)
  • Decorations and award recommendations — Purple Heart citations, Combat Action Badges, medals, and decorations for valor

Virginia and Equitable Distribution

Virginia is an equitable distribution state for divorce. This means assets and debts are not always split equally; they are divided based on what is equitable (just and fair).

Let’s assume you are the retired, disabled service member and your spouse earned less than you. Your spouse’s equitable portion of all assets and debts could be anywhere from 0 to 50 percent; a Circuit Court judge could apportion to you 50 to 100 percent of assets and liabilities.

Typical divisions are usually not extreme. You both could get exactly half of all assets and debts under Code of Virginia § 20-107.3 or the split could be 55/45, 60/50, 70/30, and so on.

This division only applies to marital assets and debts. Any separate property remains with the spouse originally owning or earning it. If, for example, you inherited an asset, it remains yours (generally). If you bought a 1967 Ford Mustang before marriage, that sweet ride is still yours after divorce. Similarly, your spouse’s investment funds from before your marriage remain the property of your spouse (generally).

So what of CRSC, a distinct financial asset? Could your spouse’s attorney argue that the “intangible” benefits provided by your spouse during your military service and after your injury entitle your spouse to a portion of your CRSC?


Endless confusion arises from Congress’s good intentions. CRDP, or Concurrent Retirement and Disability Pay, predates CRSC. CRDP, says the Defense Finance and Accounting Service, “is a monthly payment to restore retired pay for those with service-connected disabilities who waive retired pay for VA disability pay.”

A disabled service member can elect to receive VA benefits and either CRDP or CRSC, not both. CRDP payments recognize a disabled veteran’s sacrifice for a service-related injury. CRSC payments are for a much higher degree of sacrifice.

Lowering retirement pay by the amount received from the VA reduces the military service member’s tax exposure. This is the “disability waiver” used to reduce taxes on the disabled service member.

CRDP payments are taxable income and can be divided in divorce.

CRSC and Taxes

Military retirement benefits can be equitably divided in divorce under the Uniformed Services Former Spouses’ Protection Act (USFSPA). This decision is left to individual states. Virginia allows spouses to share in these benefits. Reducing the retirement benefits, then, reduces the amount the spouse could receive in divorce.

But what about CRSC payments? They are tax exempt. The payments are recognition of a service member’s enormous sacrifice from any of these situations:

  • Armed conflict (in combat or during an occupation or raid), or
  • Hazardous duty (like demolition, flying, or parachuting), or
  • War simulation activities (like live fire weapons practice or hand-to-hand combat training), or
  • Exposure to instruments of war (like a military vehicle, weapon, or chemical agent), or
  • An activity for which you received a Purple Heart

As such, the compensation is not taxable. If you did somehow pay taxes in the past on CRSC, the IRS helpfully offers a path to receive a federal tax refund. If you pay your spousal support and child support, nobody but you is entitled to your CRSC. (If you do not pay spousal support or child support, CRSC payments are subject to garnishment.)

Randolph v. Sheehy

The Virginia Court of Appeals in January of 2023 underscored the unique status of CRSC in a divorce case, Randolph v. Sheehy. State courts cannot supersede federal statutes. CRSC is an adjustment made to compensate for the loss of retirement pay when a wounded veteran receives VA benefits.

The wounded service member is entitled to both the VA compensation and military retirement pay. Therefore, no state can order the wounded warrior to give up that earned entitlement.

In the appealed case, lower Virginia courts erred by compelling the veteran, Jody Bart Randolph, to revoke his election for CRSC so that his divorced spouse, Kerry Ann Sheehy, could receive the maximum equitable portion of his military retirement pay.

CRSC and Divorce

As much as your spouse may have lent support to you in your military service and in recovering from war wounds, your spouse did not get wounded. Your spouse did not serve alongside you, suffer the disability you suffered, or spend months and years slowly recovering. Your spouse is not automatically entitled to any portion of CRSC in divorce.

To be completely, absolutely, crystal clear: CRSC payments a military service member receives are not subject to taxation or to division in divorce.

Your spouse’s attorney may still attempt to lay siege to your CRSC payments. The laws are complex and confusing, so much so that Virginia courts, Appeals courts, and the Virginia Supreme Court are still unraveling individual cases related to military pay and divorce. Shortly after Randolph v. Sheehy (in March, 2023), the Virginia Supreme Court decided Yourko v. Yourko. That case involved military retirement entitlements, divorce, and marital agreements.

We are not seeking to confuse you but:

  • The Virginia Supreme Court reversed the Court of Appeals decision that reversed the Virginia Circuit Court

Did you follow that? The Circuit Court ruled one way, the Court of Appeals ruled the other way, and the Virginia Supreme Court upheld the original ruling. And these are all legal professionals! Yikes!

The ruling in Yourko v. Yourko is significant for CRSC payments and divorce because your attorney during and after a Virginia divorce needs to know that a marital agreement can supersede the federal statutes. You can inadvertently sign away your rights to keep the CRSC payments. If you sign a marital contract (prenuptial agreement, postnuptial agreement, or property settlement agreement), you are bound by that contract.

Connect with an attorney who knows your rights. Work with a lawyer who will protect you, even in the face of confounding, contradictory rulings. As you can see by the two 2023 decisions, a competent Virginia divorce attorney must keep up with current rulings. A good, experienced Virginia lawyer will look out not only for you in the here and now, but in the future as well.

When you cast about for a good divorce lawyer, feel free to be assertive. Explain your situation. Tell the prospective attorney that you receive CRSC (and do not say what that means; an attorney with vast work experience should know). Ask if your divorcing spouse can come after those benefits.

A seasoned, knowledgeable attorney should be able to answer you as clearly as we did:

  • Your CRSC benefits are not taxable, not marital property, and can only be taken from you for spousal support, child support, or by your willful decision to sign a marital contract.

When you work with The Firm For Men, you get all your questions answered. Sure, some answers may be complex (is anything about the military simple?), but we will do our best to get you the answers and the justice you deserve. Contact our Virginia Beach office today or call us at (757) 383-9184. We can get started getting you the help you need.