VA and DFAS exchange data through an automated interface, and VA compensation is legally required to be offset dollar-for-dollar against military retired pay under 38 U.S.C. § 5304 and 38 CFR § 3.750, because a veteran generally cannot receive both full military retired pay and full VA disability compensation for the same period. The problem you're describing usually happens when someone waives military retired pay under 5 U.S.C. § 8332/8411 in order to credit that active-duty time toward a civil service (CSRS or FERS) annuity through OPM. Once that waiver is processed, DFAS should show $0 in current retired pay, but the VA's data feed sometimes still reflects historical retired pay records, or the waiver update at DFAS has not fully propagated to the system VA queries. This creates a loop where VA tells you to fix it with DFAS, and DFAS says there's nothing to audit because you no longer receive retired pay.
The way to break this loop is to change what you're asking each agency for. Instead of requesting a 'pay audit' from DFAS, request a formal statement or letter from DFAS confirming the date your retired pay was waived and that you have received no retired pay since that date (sometimes called a 'zero retired pay' or waiver confirmation letter). You will also want documentation from OPM showing you used that military service to purchase civil service retirement credit, since that is independent proof the same period isn't being double-counted.
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 →Once you have that documentation, submit it directly to VA, not as an attachment buried in a general inquiry, but as evidence tied to either a Supplemental Claim (VA Form 20-0995) with the DFAS/OPM letters as new evidence, or a Higher-Level Review (VA Form 20-0996) if you believe the prior decision misapplied the offset rule to facts VA already had. Clearly state in a written statement (VA Form 21-4138 or a personal statement) that you waived military retired pay under 5 U.S.C. § 8332 for civil service annuity credit and are not concurrently receiving retired pay.
If the standard claims channel keeps closing the issue without addressing the waiver, contacting your congressional representative's casework office or the VA's IRIS system to escalate the DFAS data mismatch can help get a human to manually correct the record rather than rely on the automated match.
Next step: obtain a written DFAS letter confirming the waiver and zero current retired pay, then file a Supplemental Claim (VA Form 20-0995) attaching that letter along with your OPM buy-back documentation.
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