How do DFAS audits and retroactive payments work for retirees eligible for CRDP or CRSC?
Executive summary
DFAS runs audits whenever a retiree becomes newly eligible for Concurrent Retirement and Disability Pay (CRDP) or is approved for Combat-Related Special Compensation (CRSC) to determine whether retroactive pay is due and to calculate amounts; DFAS may pay some retroactive amounts and will forward audit worksheets to the VA when VA retroactive compensation is involved [1] [2] [3]. Expect coordination between DFAS and VA, variable timelines (often 30–90 days or longer), and occasional inconsistencies in public reporting and call-center guidance that produce confusion for retirees [4] [5] [6].
1. Programs and trigger events that start an audit: what makes DFAS act
Eligibility changes that matter are either a new CRSC award or a VA rating change/evidence that makes a retiree eligible for CRDP; DFAS receives notice of those events and initiates an audit of the retiree’s retired-pay account to determine current entitlements and potential retroactive payments [3] [2] [7].
2. What the DFAS audit actually does: recounting the numbers
The DFAS audit reconciles historical retired-pay offsets, waived amounts, and any combat-related special compensation elements to compute what monthly payments should have been and to quantify any withheld or restored amounts for the retroactive period; DFAS produces an audit worksheet (sometimes called an Audit Error Worksheet) that documents its findings and that the VA may use when it owes retroactive VA compensation [8] [3].
3. Who pays what: DFAS vs. VA responsibility for retro pay
DFAS is the payment office that issues CRDP/CRSC monthly payments and will pay retroactive amounts that reflect restoration or recalculation of retired pay; when VA compensation retro is implicated, DFAS generally forwards the audit to the VA so the VA can calculate and pay any retroactive compensation owed to the retiree [4] [5] [8] [2].
4. Effective dates and limits on retroactivity
Retroactive CRDP generally backdates only to the retiree’s effective eligibility date (with statutory backdating rules applicable to CRDP implementation) while CRSC carries its own effective dates and a six-year statute of limitations for retro claims tied to VA rating decisions or entitlement dates, making timely filing and tracking important for maximum recovery [5] [2] [3].
5. Typical timelines and why they stretch out
DFAS aims to begin monthly CRDP/CRSC payments first and then process back pay, with public-facing guidance that retro processing can take 30–90 days after first monthly payment but audits, coordination with the VA, and caseload backlogs can extend waits to many months—or longer in practice—especially when DFAS must forward and wait on VA calculations [4] [5] [9] [6].
6. Common pain points and conflicting narratives
Retirees report inconsistent call-center responses, variable audit timing, and anecdotal delays—forums capture experiences of audits completed in weeks while others describe 12–24 month waits for VA retro—highlighting that official process steps exist but operational bottlenecks and communication gaps create uncertainty [6] [10] [11].
7. What the record says retirees can do and what remains opaque
DFAS provides customer service and tools (e.g., Ask Retired Pay) and states it will release DFAS-determined retro funds within a short period after establishing monthly payments, but exact waits for VA-paid retro rely on VA processing of the DFAS audit; public sources document the mechanics but not a guaranteed timeline, and independent reports urge retirees to follow up through DFAS and VA channels when delays appear [4] [12] [9].
8. Bottom line and competing perspectives
The documented mechanics are straightforward: DFAS audits, DFAS pays restored retired-pay amounts and forwards audit worksheets to VA when VA retro is involved, and VA pays its portion after reconciling DFAS documentation; nevertheless, operational realities—backlogs, variable processing times, call-center inconsistency, and case-by-case complications—mean retirees should expect variability and maintain active follow-up with DFAS and VA [3] [4] [6].