Collecting both was considered double dipping, and not only frowned upon it was simply illegal. Well recently Congress worked with the Veterans Administration to cut through some of the red tape. If a veteran has been in combat and wounded, then upon his separation he now qualifies for full retirement pay. This benefit is mainly accessible for career veterans with twenty years or more of service. It allows qualified military retirees that are retired and who have a related disability that was caused by combat or received in combat to receive both types of benefits.
This is a new program and it starts immediately unlike some type of programs that are phased in over a longer period of time. If a veteran is qualified and reaches retirement age, they will receive their full retirement allowances and pay, plus any disability pay they are qualified for due to a military combat related injury. The new CRST legislation that allowed for these benefits were part of the National Defense Authorization Act. This area of benefits allows for veterans who have been disabled because of: being an instrument of war, functioning or being involved in a unit engaged in or simulating war, or being actually in an armed conflict or war conflict.
The parent branch of service that the veteran serves with has some of the discretion regarding the exact benefits and amounts that are made available to the veteran, but for the most part a veteran is qualified for full benefits under both types of funding. The specific provisions are still in flux, and may change a little bit but the new legislation promises to be a godsend for many Veterans who have been injured in combat, especially those with long military careers.
The military branch that they serve with determines the eligibility for a retiree to sign up for this program. It is nearly automatic however each branch reserves the right to make the final determination in each individual case. Eligibility is determined from those who have been deemed by the VA to be at least sixty percent disabled, and those who have served at least twenty years and eligible for military retirement.