Posted on Aug 15, 2015
FYI, if you received any form of Severance Pay from the Military. The VA will recoup before you receive any compensation.
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Just an FYI, I didn't know the answer until VA came calling. As it turns out ANY form of severance pay will be recoup before you receive any compensation.
Posted in these groups: 
Department of Veterans Affairs (VA)
Military Pay
Veterans Service Representative
Department of Veterans Affairs (VA) Military Pay Veterans Service Representative
Posted >1 y ago
Responses: 10
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SSG Mike Simpson
That's why I was forced out of the service due to a back injury on active duty that was not combat related. Eighteen and a half years and a broken back in a free fall demonstration jump sent me out the door with no VA disability payments until July, 2016 - 24 years after I was separated!
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SGT (Join to see)
Wow, that is really terrible. I used the Texas Veterans Commission and they had my claim within 6 months. Sorry to hear about your ordeal brother.
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As someone who is currently having his disability payments taken away this whole thing seems like the biggest scam in the world. It is easy for the DOD to offer up these big fat separation bonuses knowing they will get most of it back on the back end because of disability claims. I did not file a disability claim until nearly a year after I got out. I thought disability payments are for injuries and illnesses during service AS WELL AS LOSS OF POTENTIAL for the rest of my life because of the disabilities. I am on the verge of losing everything because of recoupment of my disability. When you consider the harm that was done to my body I do not see how this can be considered double dipping.
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My husband was discharged from the army due to reduction in force and received separation pay. He then joined the army reserves and later got awarded VA disability. They have been recouping his separation pay for over three year. During these three years he has been receiving drill pay. Will he had to pay back all the drill money he has got?
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CH (LTC) (Join to see)
I speak as someone who is in the same boat and has been researching this but the regulation states you cannot collect both drill pay and VA disability compensation pay for any day you are drilling during that month; this also includes your AT as well. So at the end of the fiscal year your husband will receive a letter from the VA stating this is what they have annotated as the amount of days you collected both drill pay and VA disability pay. For a Reservist doing only the standard one weekend a month and 2 weeks a year it generally comes out to about 63 days give or take (this is dependent on going to schools, extra drill days, medical, dental visits, etc. etc.). On that form will be how much you owe the VA and how you want to go about paying it back. Usually the best thing to do is to let them recoup whatever amount you owe out of your monthly VA disability compensation pay as your husband actually ends up making more money per day in drill pay than he would in monthly compensation pay. I'm just gonna throw out this number so take it with a grain of salt but say your husband's monthly disability compensation pay is $300. If you divide that by 30 you get $10 a day which is how much the VA pays but they pay it up front for 30 days. Now say your husband makes $150 in a 2 day drill weekend. If you divide that by 2 your husband actually makes $75 a day in drill pay compared to the $10 a day in VA disability compensation pay. So you see how its more lucrative to keep your drill pay and maybe set aside $20 from that drill pay and put it in a savings account that you can dip into when the VA sends their letter of intent to collect. That's the current plan I have in place right now so I'll let you know at the end of this FY19 if I made the right choice. Blessings!!!
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VETS WHO ACCEPT SEPARATION PAY CAN’T RECEIVE VA COMPENSATION By James Clark
on December 30, 2015
http://taskandpurpose.com/vets-who-accept-separation-pay-cant-receive-va-compensation/?utm_source=twitter&utm_medium=social&utm_campaign=share&utm_content=tp-share
Under federal law, until veterans pay back their involuntary separation pay, they can have their VA disability compensation withheld.
After 31-year-old Marine veteran Tim Foster received a 50% disability rating from the Department of Veterans Affairs in January, he was shocked to discover the compensation benefits would be withheld until May 2016.
The reason, Foster explained to Task & Purpose, is that he received $30,000 in involuntary separation pay from the Marine Corps when he was forced out in August 2014, due to personnel cuts. Foster said he accepted the separation pay, not realizing he would have to pay it back if he filed for disability.
And he isn’t alone.
In the last five years, the VA withheld more than $401 million in disability compensation from 24,988 veterans, with $261 million scheduled to be withheld from future benefits, according to Meagan Lutz, a spokesperson for the VA. The department’s public affairs office provided Task & Purpose with statistics breaking down these figures. [chart-original] The reason for this is due to 10 USC 1174, a federal law precluding duplication of benefits. The law requires that the VA recoup military separation benefits paid by the Department of Defense in cases where a veteran is subsequently awarded VA compensation, explained Terry Jemison, another spokesperson for the VA, in an email to Task & Purpose.
VA disability benefits can be withheld if a veteran receives readjustment pay, non-disability severance pay, separation pay, reservist involuntary separation pay, special separation benefits, voluntary separation pay, or disability severance pay.
The VA is required to withhold some or all of a veteran’s monthly compensation until this recoupment is complete. The process can take years, and for some veterans, like Foster, their benefits are still being withheld long after they’ve spent their separation pay.
Tim Foster in his barracks at Camp Lejeune in 2005 just before his second deployment to Iraq. [Photo courtesy of Tim Foster]
Tim Foster in his barracks at Camp Lejeune, North Carolina, in 2005 just before his second deployment to Iraq.
Foster, a combat veteran of the wars in Iraq and Afghanistan, served from June 2003 to August 2014 as an assaultman, before he changed jobs to be a missileman. Later, he spent three years as a recruiter before being separated as a sergeant.
Foster filed for disability benefits in October 2014 and since he was approved for compensation in January, he’s had his rating increased twice, first to 70%, and to 80%, where it stands now. Due to his health concerns, Foster said he is unable to work and with his disability benefits withheld until his separation pay is recouped, it puts him under financial strain.
After leaving the military, Foster moved from California to West Virginia, where he now lives and attends American Military University on the post-9/11 G.I. Bill. When he left the Marines, Foster spent three months looking for work, but in May of this year, he lost his job, and filed for individual unemployability.
It was also at this time that he began struggling with post-traumatic stress, he said. Although he is unable to receive compensation from the VA, he is still able to receive care.
“It doesn’t make any sense at all,” said Foster, who compared it to receiving a severance package after being laid off from a company, only to have social security require you to pay that money back. “Separation pay and disability pay come from two separate pots of money and they’re two totally separate things.”
As for the $30,000 in separation pay that he received? It’s long gone, said Foster, who explained that it went toward moving, housing, and living expenses.
“If I didn’t have to pay back that separation pay, I’d at least have something,” said Foster.
on December 30, 2015
http://taskandpurpose.com/vets-who-accept-separation-pay-cant-receive-va-compensation/?utm_source=twitter&utm_medium=social&utm_campaign=share&utm_content=tp-share
Under federal law, until veterans pay back their involuntary separation pay, they can have their VA disability compensation withheld.
After 31-year-old Marine veteran Tim Foster received a 50% disability rating from the Department of Veterans Affairs in January, he was shocked to discover the compensation benefits would be withheld until May 2016.
The reason, Foster explained to Task & Purpose, is that he received $30,000 in involuntary separation pay from the Marine Corps when he was forced out in August 2014, due to personnel cuts. Foster said he accepted the separation pay, not realizing he would have to pay it back if he filed for disability.
And he isn’t alone.
In the last five years, the VA withheld more than $401 million in disability compensation from 24,988 veterans, with $261 million scheduled to be withheld from future benefits, according to Meagan Lutz, a spokesperson for the VA. The department’s public affairs office provided Task & Purpose with statistics breaking down these figures. [chart-original] The reason for this is due to 10 USC 1174, a federal law precluding duplication of benefits. The law requires that the VA recoup military separation benefits paid by the Department of Defense in cases where a veteran is subsequently awarded VA compensation, explained Terry Jemison, another spokesperson for the VA, in an email to Task & Purpose.
VA disability benefits can be withheld if a veteran receives readjustment pay, non-disability severance pay, separation pay, reservist involuntary separation pay, special separation benefits, voluntary separation pay, or disability severance pay.
The VA is required to withhold some or all of a veteran’s monthly compensation until this recoupment is complete. The process can take years, and for some veterans, like Foster, their benefits are still being withheld long after they’ve spent their separation pay.
Tim Foster in his barracks at Camp Lejeune in 2005 just before his second deployment to Iraq. [Photo courtesy of Tim Foster]
Tim Foster in his barracks at Camp Lejeune, North Carolina, in 2005 just before his second deployment to Iraq.
Foster, a combat veteran of the wars in Iraq and Afghanistan, served from June 2003 to August 2014 as an assaultman, before he changed jobs to be a missileman. Later, he spent three years as a recruiter before being separated as a sergeant.
Foster filed for disability benefits in October 2014 and since he was approved for compensation in January, he’s had his rating increased twice, first to 70%, and to 80%, where it stands now. Due to his health concerns, Foster said he is unable to work and with his disability benefits withheld until his separation pay is recouped, it puts him under financial strain.
After leaving the military, Foster moved from California to West Virginia, where he now lives and attends American Military University on the post-9/11 G.I. Bill. When he left the Marines, Foster spent three months looking for work, but in May of this year, he lost his job, and filed for individual unemployability.
It was also at this time that he began struggling with post-traumatic stress, he said. Although he is unable to receive compensation from the VA, he is still able to receive care.
“It doesn’t make any sense at all,” said Foster, who compared it to receiving a severance package after being laid off from a company, only to have social security require you to pay that money back. “Separation pay and disability pay come from two separate pots of money and they’re two totally separate things.”
As for the $30,000 in separation pay that he received? It’s long gone, said Foster, who explained that it went toward moving, housing, and living expenses.
“If I didn’t have to pay back that separation pay, I’d at least have something,” said Foster.
Vets Who Accept Separation Pay Can’t Receive VA Compensation
Under federal law, until veterans pay back their involuntary separation pay, they can have their VA disability compensation withheld.
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I just read this posting today and it is very disappointing that those forced out lose no matter how you look at it.
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This was explicitly stated to me as such on my separation paperwork. Really sucks when you think about it. "Here's some severance pay to help since we're involuntarily separating you due to force reductions - on a completely unrelated note that we are making related: if you ever do receive disability compensation through the VA or obtain a retirement through the Reserves or National Guard, you gotta pay that money back."
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Maj Matt Hylton
Found my paperwork, it specifically states:
"INDIVIDUAL READY RESERVE AGREEMENT CONDITIONAL FOR SEPARATION PAY
I agree to serve in the Ready Reserve for a period of not less than 3 years following my separation from active duty. I understand that:
. . .
d. If I later become eligible for retired or retainer pay under United States Code, Title 10 or Title 14, based on active duty service for which I received separation pay, I will have an amount deducted from each payment of that retired or retainer pay until the amount deducted equals the total amount of separation pay.
E. If I later become eligible (as a result of the service upon which my separation pay is based) for disability compensation administered by the Department of Veterans Affairs (DVA), the DVA will withhold such payments until the amount withheld equals the net amount of separation pay."
"INDIVIDUAL READY RESERVE AGREEMENT CONDITIONAL FOR SEPARATION PAY
I agree to serve in the Ready Reserve for a period of not less than 3 years following my separation from active duty. I understand that:
. . .
d. If I later become eligible for retired or retainer pay under United States Code, Title 10 or Title 14, based on active duty service for which I received separation pay, I will have an amount deducted from each payment of that retired or retainer pay until the amount deducted equals the total amount of separation pay.
E. If I later become eligible (as a result of the service upon which my separation pay is based) for disability compensation administered by the Department of Veterans Affairs (DVA), the DVA will withhold such payments until the amount withheld equals the net amount of separation pay."
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Service members can Fight this policy. You must contact your member of Congress and US Senator...
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SSG Michael DeBerry
SSG Mike Busovicki -
The DOD Financial Management Regulation, Volume 7A, Chapter 35, paragraph 350205 contains the relevant Public Law regrading recoupment of pay:
350205. Recoupment of Separation Pay From Retired or Retainer Pay or From Department of Veterans Affairs (VA) Disability Compensation. Except as provided under subparagraph 350205.C, military members who receive separation pay, severance pay, or readjustment pay under any provisions of law based on service in the Armed Forces, and, subsequently, either qualify for retired or retainer pay under 10 U.S.C. or 14 U.S.C. or become eligible for disability compensation administered by the VA, are subject to the recoupment of the gross taxable separation, severance, or readjustment pay they received, which shall be accomplished from retired or retainer pay or VA disability compensation, as follows:
A. Retired Pay. Recoupment shall be accomplished through monthly deductions from each payment of retired or retainer pay payable to the retired member until the total amount of the deductions equals the gross taxable amount of separation, severance, or readjustment pay received by the member. (NOTE: See Chapter 4 of DoD FMR Volume 7B for guidance on the calculation of the recoupment.)
B. VA Disability Compensation. Recoupment shall be accomplished through a deduction from the VA disability compensation payable to the retired member in an amount that is equal to the gross taxable amount of separation, severance, or readjustment pay made after September 30, 1996. The amount to be deducted from the VA disability compensation shall be equal to the gross taxable amount of such separation, severance, or readjustment pay, less the amount of Federal income tax withheld from such pay at the flat withholding rate for supplemental payments prescribed under Publication 15, Department of the Treasury, Internal Revenue Service. This reduction, however, shall not apply to disability compensation for which the entitlement to that disability compensation is based on a later period of active duty than the period of active duty for which the separation pay, severance, or readjustment was received.
C. Repay Severance or Readjustment Pay. Notwithstanding subparagraphs 350205.A and 350205.B, members who received severance or readjustment pay before September 15, 1981, and who, on or after September 15, 1981, became entitled to retired or retainer pay under 10 U.S.C. or 14 U.S.C., are required to repay the severance or readjustment pay, in accordance with the laws in effect on September 14, 1981.
The DOD Financial Management Regulation, Volume 7A, Chapter 35, paragraph 350205 contains the relevant Public Law regrading recoupment of pay:
350205. Recoupment of Separation Pay From Retired or Retainer Pay or From Department of Veterans Affairs (VA) Disability Compensation. Except as provided under subparagraph 350205.C, military members who receive separation pay, severance pay, or readjustment pay under any provisions of law based on service in the Armed Forces, and, subsequently, either qualify for retired or retainer pay under 10 U.S.C. or 14 U.S.C. or become eligible for disability compensation administered by the VA, are subject to the recoupment of the gross taxable separation, severance, or readjustment pay they received, which shall be accomplished from retired or retainer pay or VA disability compensation, as follows:
A. Retired Pay. Recoupment shall be accomplished through monthly deductions from each payment of retired or retainer pay payable to the retired member until the total amount of the deductions equals the gross taxable amount of separation, severance, or readjustment pay received by the member. (NOTE: See Chapter 4 of DoD FMR Volume 7B for guidance on the calculation of the recoupment.)
B. VA Disability Compensation. Recoupment shall be accomplished through a deduction from the VA disability compensation payable to the retired member in an amount that is equal to the gross taxable amount of separation, severance, or readjustment pay made after September 30, 1996. The amount to be deducted from the VA disability compensation shall be equal to the gross taxable amount of such separation, severance, or readjustment pay, less the amount of Federal income tax withheld from such pay at the flat withholding rate for supplemental payments prescribed under Publication 15, Department of the Treasury, Internal Revenue Service. This reduction, however, shall not apply to disability compensation for which the entitlement to that disability compensation is based on a later period of active duty than the period of active duty for which the separation pay, severance, or readjustment was received.
C. Repay Severance or Readjustment Pay. Notwithstanding subparagraphs 350205.A and 350205.B, members who received severance or readjustment pay before September 15, 1981, and who, on or after September 15, 1981, became entitled to retired or retainer pay under 10 U.S.C. or 14 U.S.C., are required to repay the severance or readjustment pay, in accordance with the laws in effect on September 14, 1981.
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Same happens with retirement pay for all retirees and drill pay for reservists.
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Sgt Spencer Sikder
If a retiree is over 50% he/she should fall under concurrent receipt, meaning collecting both their retirement and their VA disability.
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Good to know, thank you. I will keep this in mind for when I get to that stage of my career.
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SPC Elijah J. Henry, MBA
Sgt Gus Laskaris No, small misunderstanding there. I reckon I should have said "if". I have had a few rough jumps lately...
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