Combat Related Special Compensation pay consists of tax-free payments to Veterans who have combat-related disabilities. Eligibility determinations are very fact specific and must be documented.
No, it is not military retired pay. It was established to provide special compensation to Service members of the uniformed services who have retired pay reduced by reason of receiving Department of Veterans Affairs disability compensation where a portion of such VA compensation is the result of disabilities that are combat-related.
According to the DOD Financial Management Regulations, generally, combat-related means: (1) direct result of armed conflict, (2) while engaged in hazardous service, (3) in the performance of duty under conditions simulating war and (4) instrumentality of war.
The disability is a disease or injury that occurred in the line of duty as a direct result of armed conflict. Incurring a disability during a period of war in not sufficient. There must be a definite casual relationship between the armed conflict and the resulting disability.
Hazardous service includes aerial flights, parachute duty, demolition duty, experimental stress duty, or diving duty. Injuries sustained while traveling to and from hazardous duty are not included. Also, actions incidental to a normal duty are not considered hazardous.There must be a finding that a disability is the result of such hazardous service; the injury or disease is the direct result of actions taken in the performance of such hazardous service.
Conditions simulating war include injuries sustained during military training, such as war games, practice alerts, airborne operations, leadership reaction courses, grenade and live fire weapon practice, bayonet training, hand-to-hand combat training, repelling, and negotiation of combat confidence and obstacle courses. Regular running, jogging or supervised sports activities are not included.
An instrumentality of war is a vehicle, vessel, or device designed primarily for military service and intended for such use. There must be a direct casual relationship between the instrumentality of war and the disability. Examples include a Service member engaging in a sporting activity who is struck by an armored vehicle causing an injury. On the other hand, if a Service member engages in a sporting activity and falls and strikes an armored vehicle - this is not included.
Here are links with additional resources: