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Unfortunately, the ability to receive both military retirement and VA disability pay at the same time (concurrent payment) is restricted to those with 20 years of qualifying retirement service. Then the idea is that the 20 years locked in the right to retirement pay, so the retirement isn't based on disability at all...but rather, the completed military service. So, the concurrent pay is legally considered appropriate because there is pay being granted for two different reasons (a. Completed military service of 20 years. b. Medical issue effecting civil***** *****fe which is based on military service.)
That right though is not extended to those that are medically retired prior to reaching their full measure of service of at least 20 years. When one is medically retired, it is money for the disability. So, the problem them is that you have two sources of money for that exact same purpose...both paying for disability based on military service. Concurrent pay then is not legally permitted. The only other way then to get concurrent pay is when the medical retirement is combat related.
On the facts you've given, unfortunately it wouldn't appear that you are eligible for the narrow circumstances allowing for concurrent pay because you didn't reach 20 years of service and your injuries are not directly attributable to combat service. In your case, it would be best to continue pressing the VA for increased disability (as your back gets worse) and waive the retirement in favor of the VA pay (which would not be taxable).