As a rule, federal laws are superior over state laws. However, there may be situations wherein the state laws are upheld and not the laws of the U.S., especially when it concerns domestic issues as expressed by the Supreme Court in In Re Barrus 136 U.S. 586 (10 S.Ct. 850, 34 L.Ed. 500) that “(t)he whole subject of the domestic relations of husband and wife, parent and child, belongs to the laws of the states, and not to the laws of the United States.”
As for VA benefits, the US Congress intended that VA benefits may be considered as a source of income for support purposes. It is clear that federal law intends that VA benefits be considered for support through the graduated benefit schedules based on how many dependents a veteran has (38 USC § 1115), as well as the apportionment procedure to use when a veteran is not discharging his or her responsibility for support as stated in 38 U.S.C. 5307 (Apportionment of benefits):
“(a) All or any part of the compensation, pension, or emergency officers’ retirement pay payable on account of any veteran may—
(1) if the veteran is being furnished hospital treatment, institutional, or domiciliary care by the United States, or any political subdivision thereof, be apportioned on behalf of the veteran’s spouse, children, or dependent parents; and
(2) if the veteran is not living with the veteran’s spouse, or if the veteran’s children are not in the custody of the veteran, be apportioned as may be prescribed by the Secretary.
(b) Where any of the children of a deceased veteran are not in the custody of the veteran’s surviving spouse, the pension, compensation, or dependency and indemnity compensation otherwise payable to the surviving spouse may be apportioned as prescribed by the Secretary.
(c) If a veteran is not living with the veteran’s spouse, or if any of the veteran’s children are not in the custody of the veteran, any subsistence allowance payable to the veteran under chapter 31 of this title or that portion of the educational assistance allowance payable on account of dependents under chapter 34 of this title may be apportioned as may be prescribed by the Secretary.”