Under 38 U.S.C. § 5304(c) and 38 CFR 3.700-3.708, a veteran cannot receive both VA disability compensation and active duty or inactive duty training (drill) pay for the same day. This is sometimes called the "drill pay offset." Because military drill pay is taxable and generally smaller than a day's worth of tax-free VA compensation, most veterans who return to drilling status choose to waive their military pay for drill days rather than waive their VA compensation, since the VA payment is usually the larger, tax-free benefit.
To make this election, you file VA Form 21-8951-2, Notice of Waiver of VA Compensation or Pension to Receive Military Pay and Allowances, with your VA regional office or through eBenefits/VA.gov before or shortly after you resume drilling. On this form you specify which days you will be in a drill status and elect to waive the military pay for those specific days so that your full VA compensation continues uninterrupted. If you do not file this waiver, the Defense Finance and Accounting Service (DFAS) and VA may later identify an overlap and create an overpayment that has to be reconciled, which can create new debt similar to what you may already be managing.
Official 2026 VA monthly compensation, including the 2.8% COLA increase.
Dependent add-ons start at a 30% rating. Child-only and dependent-parent rates: see the full 2026 pay chart.
| Rating | Monthly (2026, incl. 2.8% COLA) |
|---|---|
| 10% | $180.42 |
| 20% | $356.66 |
| 30% | $552.47 |
| 40% | $795.84 |
| 50% | $1,132.90 |
| 60% | $1,435.02 |
| 70% | $1,808.45 |
| 80% | $2,102.15 |
| 90% | $2,362.30 |
| 100% | $3,938.58 |
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Analyze my claim free →It is also worth confirming with your unit's admin or your Reserve pay office how they handle drill pay for days you've waived, since you will still typically receive retirement points and TRICARE eligibility for qualifying drill periods even when the pay itself is waived. TRICARE eligibility is tied to your Selected Reserve status and point/drill participation rules, not to whether you actually draw drill pay, so waiving drill pay for VA compensation purposes should not affect your TRICARE access as long as you remain in good standing in your unit.
The concrete next step is to contact your VA regional office or submit VA Form 21-8951-2 before your next drill period to formally elect the VA compensation-over-drill-pay option, and confirm with your unit's pay and personnel office that TRICARE and retirement point credit will not be affected by that waiver.
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