Under certain circumstances, a person who is eligible for both military retirement pay and VA compensation may choose to waive or give up their military retirement pay and instead opt for VA compensation benefits. Now, you might ask, why would someone do that? Well, the answer is actually very simple. Military retirement pay is subject to taxation, whereas VA compensation is not. So, it is possible to receive the same amount of benefits but avoid paying taxes on them, resulting in a greater amount for you to live on each month.