Posted on Jan 6, 2024
What are the pros and cons of taking the medical separation pay?
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What are the pros and cons of taking the medical separation pay? I’m hearing different opinions on this matter
ETS/EAS
Honorable Discharge
Posted 4 mo ago
Responses: 2
PROs and CONs? You make it sound like you have a choice and are weighing a decision (i.e., "What are the pros and cons so I can decide if I will accept it or not).
Generally, Disability Severance Pay (DSP) is given if you are found unfit for duty, are not retirement eligible and the military has rated the disabilities at less that 30%. There aren't any "PROs" or "CONs" about it unless you view getting a monetary amount a 'PRO' and being separated from the military a 'CON'.
However, if you want the facts (as opposed to opinions) of DSP, then you can read up on it at MyArmyBenefits* site (has additional links for amplifying information as well).
Is there some specific aspect of DSP that you are wondering about?
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* https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/DoD-Disability-Severance-Pay-?serv=122
Generally, Disability Severance Pay (DSP) is given if you are found unfit for duty, are not retirement eligible and the military has rated the disabilities at less that 30%. There aren't any "PROs" or "CONs" about it unless you view getting a monetary amount a 'PRO' and being separated from the military a 'CON'.
However, if you want the facts (as opposed to opinions) of DSP, then you can read up on it at MyArmyBenefits* site (has additional links for amplifying information as well).
Is there some specific aspect of DSP that you are wondering about?
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* https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/DoD-Disability-Severance-Pay-?serv=122
The Secretary of the Army may separate, versus retire, a Soldier who is found physically unfit to perform their duties due to a disability.
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SPC (Join to see)
What concern me iOS whatever amount Im going to receive is going to be tax and I’m going to need to repay the full amount. Some who took it before is telling me the he lost some benefits due to accepting the pay in just trying to get the best advises possible to make the best decision out the whole process which is more stress at this point. Thank you for your input sir.
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COL Randall C.
SPC (Join to see) - You are correct. DSP is considered taxable income, so you'll have to figure you'll give about 20% for a SPC (give or take .. depends on your total tax burden .. the 20% is not just federal income taxes, but also FICA, possibly state, etc.) back to the government. Since the formula is (Base monthly pay * 2 months * years of service), a VERY ROUGH guess would be somewhere in the vicinity of $24,000 (assuming you have ~4 years) so you would have around (again, a very rough guess) $4,800 in taxes you would have to pay on it.
Additionally, if you are rated at higher than 30% by the VA* and receive monthly disability compensation, then by law the VA must recoup* the after-tax payments as you can't be compensated twice by the government for the disabilities (basically, they will withhold that amount from your VA disability compensation).
This is general guidance for you as the law does some weird things about the recoupment - you would have to talk to someone at the VA to get the exact details of what will be recouped (but what I gave you above should be the 90% answer).
HOWEVER, if any of your rated disabilities are combat-related (or combat training-related) or incurred in a combat zone, then that changes a lot of what I said above. If your DSP is for a disability that was combat/combat-training related or incurred while you were in a combat zone, then you don't pay federal taxes on it and the VA doesn't recoup it. Again, this is specific to those disabilities, so if you have multiple ones, they are treated separately.
As to benefits being lost - that's a new one for me. Your post-service benefits are all determined by your service and characterization of your discharge. Your DSP should have no impact on that at all. Specific to the VA, your benefit eligibility would be determined only by the characterization of discharge because if you are medically separated there isn't a specified amount of service required for benefits.
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* A disability rating from DoD and the VA are based on different criteria. DoD looks at your ability to perform the functions expected of you as a Soldier performing your MOS while the VA looks at the impact that any disabilities you suffered while performing military service will affect you later in life. If you are being put through the IDES process (e.g., you are being 'medically boarded'), then you will have a VA rating developed concurrently with your DoD rating.
* DoD 700.14-R, Vol 7B, Chap 4 (Recoupment of Separation Pay) - https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_04.pdf
Additionally, if you are rated at higher than 30% by the VA* and receive monthly disability compensation, then by law the VA must recoup* the after-tax payments as you can't be compensated twice by the government for the disabilities (basically, they will withhold that amount from your VA disability compensation).
This is general guidance for you as the law does some weird things about the recoupment - you would have to talk to someone at the VA to get the exact details of what will be recouped (but what I gave you above should be the 90% answer).
HOWEVER, if any of your rated disabilities are combat-related (or combat training-related) or incurred in a combat zone, then that changes a lot of what I said above. If your DSP is for a disability that was combat/combat-training related or incurred while you were in a combat zone, then you don't pay federal taxes on it and the VA doesn't recoup it. Again, this is specific to those disabilities, so if you have multiple ones, they are treated separately.
As to benefits being lost - that's a new one for me. Your post-service benefits are all determined by your service and characterization of your discharge. Your DSP should have no impact on that at all. Specific to the VA, your benefit eligibility would be determined only by the characterization of discharge because if you are medically separated there isn't a specified amount of service required for benefits.
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* A disability rating from DoD and the VA are based on different criteria. DoD looks at your ability to perform the functions expected of you as a Soldier performing your MOS while the VA looks at the impact that any disabilities you suffered while performing military service will affect you later in life. If you are being put through the IDES process (e.g., you are being 'medically boarded'), then you will have a VA rating developed concurrently with your DoD rating.
* DoD 700.14-R, Vol 7B, Chap 4 (Recoupment of Separation Pay) - https://comptroller.defense.gov/Portals/45/documents/fmr/current/07b/07b_04.pdf
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So I am assuming you are referring to a med board where the individual gets under 30% but is deemed they need to be medically separated. If it is a different situation please clarify.
I would recommend fighting the findings and appeal to the medical board. If it is bad enough to warrant medical separation it would be worth your time and effort to fight for 30% or higher which would mean medical retirement. The separation money isn't free money and is more like an advance to get you back on your feet.
I would recommend fighting the findings and appeal to the medical board. If it is bad enough to warrant medical separation it would be worth your time and effort to fight for 30% or higher which would mean medical retirement. The separation money isn't free money and is more like an advance to get you back on your feet.
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SPC (Join to see)
Yes medical board. Do you know what benefits someone under 30% keep or lose and what benefits they keep or lose over 30%? Just trying to educate my self in this matter?
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SSgt Christophe Murphy
SPC (Join to see) Well it’s the difference of being a retiree or being a veteran that isn’t a retiree.
Retiree gets the retiree ID card and all benefits that come with it to include Tricare. The only thing you don’t get is a monthly retirement check if your percentage is less than 50%. My DOD retirement is 30% so I get all the goodies to include on base privileges and all that but I don’t get the retirement check but if Richard Starr act passes that will change.
Less than 30% just means you are medically seperated and will be reflected in your RE code which will mean you can most likely not re-enlist.
Retiree gets the retiree ID card and all benefits that come with it to include Tricare. The only thing you don’t get is a monthly retirement check if your percentage is less than 50%. My DOD retirement is 30% so I get all the goodies to include on base privileges and all that but I don’t get the retirement check but if Richard Starr act passes that will change.
Less than 30% just means you are medically seperated and will be reflected in your RE code which will mean you can most likely not re-enlist.
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SPC (Join to see)
SSgt Christophe Murphy So it means I can not go on any post with the veteran ID unless I’m get retired?
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SSgt Christophe Murphy
SPC (Join to see) - That's right, They have given additional privilege's to Veterans than they did a decade ago. That has only been a thing for a few years. https://www.military.com/benefits/veteran-benefits/everything-veterans-need-know-about-accessing-base-benefits.html#:~:text=Only%20with%20a%20VHIC%20can%20the%20veteran%20get%20access%20to%20the%20base.&text=All%20a%20veteran%20has%20to,find%20out%20where%20to%20go.
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