Military Retirement Pay Compensation

• Military retirement pay is one type of compensation that veterans receive, regardless of whether they are, in fact, disabled. Under the Uniformed Services Former Spouses' Protection Act, military retirement pay is treated as marital property and is thereby divided equitably among both parties in a divorce proceeding, depending on the laws in the state you live in.
  
  

VA Benefits Compensation

• VA benefits are a type of compensation available to disabled veterans. Unlike military retirement pay, VA benefits are characterized as the separate property of the disabled veteran and aren't the subject of equitable division among both spouses in a divorce proceeding. However, VA benefits are subject to allocation for child support and alimony. Additionally, VA benefits are tax free.
  
  

Veteran's Election

• If a veteran is disabled and eligible for VA benefits, he's not allowed to "double dip": This means that if he elects to receive VA benefits, he doesn't also receive his full military retirement pay on top of the VA benefits. If the veteran chooses to receive VA benefits, he waives his military retirement pay by the amount of VA benefits he's being paid.
  
  

Veteran's Election and Ex-Spouses

• The decision of the veteran to choose VA benefits over military retirement pay effectively converts what was formerly considered marital property into separate property belonging to the veteran. This doesn't mean that in the event of divorce, the veteran's benefits are "untouchable" by the veteran's spouse --- it simply means that the VA benefits are no longer marital property to be equitably divided between the parties. The veteran's VA benefits may still be included in support and alimony payments.