not allowed to double dip any more. when you are retired military and drawing VA benefits can only collect on one. but how it works is lets say your retirement is more than what the VA pays for your percentage. that part of your retirement pay will be tax free. As VA benefits (monthly check) is tax free. will pay taxes on the difference. buddy of mine is retired Navy. Drawing 60% VA disability, and got a federal job at a Navy shipyard. still young enough to work long enough to retire from the shipyard. he is still trying to figure out how that is gonna work.