How does your VA compensation interact with your Navy Reserve paycheck?

How does your paycheck as a Navy Reservist interact with your Veteran’s Administration disability compensation?

I got asked this question at the NOSC one sunny weekend.

Anyone else see a person on his knees with his head in the ground?

MILPERSMAN 7220-380 states that members may elect to receive either the payments for current military pay or the entitlements for past military service.


Service Members cannot double dip. Personnel at my NOSC were under the impression that this meant a member had to choose between BEING a reservist or accepting VA disability compensation. This is not quite true.  There is nothing in instructions from either the Veteran’s Administration or the Navy that says you cannot be both a reservist and receive compensation from your disability award.

Still, you cannot double dip. What this means is that the navy payment and VA compensation are broken down to a more granular level from the big monthly checks. The VA instruction (M21-1MR, Part III, Subpart v, Chapter 4 Section C) says this done on a prorated, per diem basis at the end of the year.  Defense Manpower Data Center (DMDC) figures out how many paid days the Service Member drilled/active duty (drill days are 4hr periods = 1 day ergo 1 Saturday of drill = 2 drill days ergo 1 drill wknd = 4 paid days). DMDC then coordinates with Hines Information Technology Center which ID’s reservists who received both VA disability comp and drilling reserve pay. 

Hines ITC then sends a letter to the Service Member to elect to choose to keep either their VA disability compensation or the reserve pay for the tallied number of days.  (For example, lets assume 48 drill days and 15 days of active duty training for a total of 63 days). The Service Member then returns the letter indicating whether they want to foreit the VA disability compensation or the Navy reserve pay.  They can also challenge the number of days of active duty if they see a discrepancy. 

At the New Year, the VA resolves the accounting by withholding the 63 days of the Service Member’s VA benefits until the account has settled and back to zero.  Members can preempt this large withholding by notifying the VA of the times that they will be drilling or on Annual Training and having the money withheld in small pieces each month. 

As an example:  An O-3 with a high disability rating was cleared by the Navy Reserve to transition from Active Duty to Reserve Duty as a drilling reservist.  His pay per day as a LT for those 63 days is much higher than his VA disability benefit, so he would elect to have them withhold 63 days of disability comp until it has settled up. 

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