Supreme Court to Weigh Combat-Disability Pay for Medically Retired Vets

Case Overview: The Supreme Court has agreed to hear a lawsuit concerning whether a six-year deadline applies to the payment of combat-related special compensation (CRSC) for medically retired veterans, a decision that could affect thousands of service members.

Consumers Affected: Medically retired veterans who were denied full retroactive combat-related special compensation.

Court: U.S. Supreme Court

The U.S. Supreme Court has agreed to hear a lawsuit that claims the Defense Department has been shortchanging thousands of medically retired veterans by limiting how far back it will pay combat-related disability benefits. 

At the center of the case is whether a six-year deadline known as the Barring Act should apply to a type of military benefit called combat-related special compensation (CRSC). The outcome could unlock millions in tax-free payments for an estimated 9,000 veterans.

Veteran Argues Six-Year Limit Unfairly Restricts Benefits

The case is led by retired Marine Cpl. Simon Soto, who served two tours in Iraq in mortuary affairs—a grueling and traumatic job that left him with post-traumatic stress disorder, Military.com reports. 

Soto medically retired in 2006 and was later granted disability compensation from the Department of Veterans Affairs in 2009. But it wasn’t until 2016 that he applied for CRSC, a separate type of benefit awarded to certain retirees whose service-connected injuries occurred in combat or under combat-like conditions.

When the Navy approved Soto's application, it only gave him back pay dating to 2010, not all the way back to when he first became eligible. Officials cited the Barring Act, which limits federal claims to six years.

Soto sued. A federal district court in Texas sided with him and ordered retroactive payments. But a higher court—the U.S. Court of Appeals for the Federal Circuit—reversed that decision, prompting Soto and his lawyers to take the case to the Supreme Court.

Legal Battle Centers on Interpretation of Federal Law

The Barring Act is a federal law that sets a six-year statute of limitations for financial claims against the government. Once six years pass from when a claim "accrues," only back pay for that time window can be awarded.

Government attorneys argue that CRSC claims are bound by this law, and agencies can't ignore that time limit unless Congress explicitly says otherwise. But Soto’s legal team, which includes the nonprofit National Veterans Legal Services Program and the law firm Sidley Austin LLP, contends that CRSC is not like other claims covered by the Barring Act.

That’s because CRSC isn’t a standard VA benefit. It’s a Defense Department program meant to offset military retirement pay that gets reduced when veterans receive VA compensation. In Soto’s case, his lawyers argue, the law that created CRSC didn’t include a strict deadline and certainly not one that would deny years of earned pay.

Ruling Could Have Significant Impact on Thousands of Veterans

The Supreme Court’s decision, expected later this year, could set a major precedent for how retroactive benefits are handled for medically retired combat veterans. If Soto wins, thousands of other veterans who served after 2008 (when Congress expanded CRSC eligibility) could receive additional tax-free payments they were previously denied.

“Whether thousands of combat veterans now and into the future lose all or part of the special compensation they earned through service to and sacrifice for our nation is an exceptionally important question,” Soto’s attorneys wrote in their petition to the court.

A ruling in favor of the government, on the other hand, would cement the six-year cap and keep a large chunk of combat-related compensation out of reach.

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