Inthe wind:
(Are you on ebenefits? You can track some of this there, although, often the payments are made before that is updated).
Okay, let's see if we can dismantle this. First, technically, and we'll get past this technicality, technically, you cannot receive both full retired pay and full VA compensation at the same time. In fact the $3 dollars witheld as your offset proves this -- you weren't getting your full retirement. There are certain classes of retired military that can't draw both retirement and VA dis as I understand (to include those rated as less than 50% disabled). However, you are not one of those.
So DFAS does owe you the amount they withheld from 1 Nov 2010 until the last time they witheld the offset. DFAS audits this themselves and pays you the difference. Remember in DFAS mind, there is just as much chance that you owe them money. But that should not be the case.
VA knows that they owe you the difference in pay between 50% paid between 1 Nov 2010 and 1 Sept 2012 and the 100% rating effective 1 Nov 2010. For some reason VA has to have the results of the DFAS audit to proceed. What VA is trying to do is avoid paying you and then later determining that they over paid you (or VA and DFAS double paid you) and have to try and get the money back.
I imagine, and this is only my imagination, the first payment you received was for the 2012 fiscal year. Since they are in that cycle, their payments get corrected automatically (me imagining). What falls before this year must be audited.
So in about 60 to 90 days you'll receive the difference between the 50 and 100%.
The letter is technically correct. If you were less than 50% you would have received VA disability and no retired pay, if the VA was more than your retired pay. If it was less than your retired pay, you would have an equal portion witheld from retired pay and then receive the full VA payment. Because VA only controls part of the payment they have to make sure it all balances out.
The real problem here is that the VA does a lousy job of explaining things and letting you know what and why specifically is happening to you. But that might double their workload.
Hopefully that 'splains things a bit. We all have gone through the same mind numbing turmoil. I think we all came out the other side.
Take care
Grey Mike