Severance pay recommended, now what?

[MilitaryBlake]

Just received my ratings today......I don't agree with my DoD rating of only 20% and recommended severance, but wondering if it is worth the battle since I am 100% with the VA. I have some thinking to do.

Questions: I thought I had a good grasp of how severance is calculated. 2x base pay, times years of service. However, my PEBLO provided an estimate in a document and he only calculated my base pay times three. I will talk to him but what gives? Does this sound correct?

Also, if severance is accepted, I understand this will come out of my VA side of things. But how? No VA until severance paid off? VA check for non-DoD ratings only and full 100% only once severance has been recovered? This is all very confusing.....

Another reason to request a formal PEB would be for the potential to apply for CRSC if formal PEB is successful and rating is increased from 20 to 30%. My 199 does not say anything, for or against, this CRSC eligibility, to my knowledge this is all applied after the fact, right? (When is MEB concluded)

Thoughts?

 

[RonG]

Hello @MilitaryBlake ,

From DFAS:

Calculation and Payment
Disability severance pay is a one-time lump sum payment. The amount equals 2 months of basic pay for each year of service which includes active service and inactive duty points, but the total service years cannot exceed 19 years. Additionally, the minimum number of years required for computation purposes is six years for a disability incurred in the line of duty in a combat zone, or 3 years in the case of any other member.

Ron

 

[tdrecord]

If you take the severance, your VA pay will be reduced by approximately $280/month (because of your 20% rating) until the severance amount is paid in full. Once that occurs, you will receive your full VA pay.

As for CRSC, if your injuries are combat-related, then you should be arguing that up front to get that designation on your paperwork. That will make it easier to apply for the CRSC.

 

[MilitaryBlake]

Hello @MilitaryBlake ,

From DFAS:

Calculation and Payment
Disability severance pay is a one-time lump sum payment. The amount equals 2 months of basic pay for each year of service which includes active service and inactive duty points, but the total service years cannot exceed 19 years. Additionally, the minimum number of years required for computation purposes is six years for a disability incurred in the line of duty in a combat zone, or 3 years in the case of any other member.

Ron

Thxs again Ron. You are a big help. This is what I thought as well. I certainly don't get how my PEBLO calculated it. I will speak with him. This is the discrepancy of how I think it should be calculated versus how he calculated it.

Base pay high 3 = 5,500 x 2 = 11,000. Times 10 years of service = $110,000. This, should be the correct way.

Way PEBLO calculated on worksheet = High three base pay x 2 = 11000. Then he times by three. No idea why calculated this way but I will discuss with him. I will pass my tenth year in service this summer prior to my official separation.

 

[MilitaryBlake]

If you take the severance, your VA pay will be reduced by approximately $280/month (because of your 20% rating) until the severance amount is paid in full. Once that occurs, you will receive your full VA pay.

As for CRSC, if your injuries are combat-related, then you should be arguing that up front to get that designation on your paperwork. That will make it easier to apply for the CRSC.

Thxs good to know......

 

[RonG]

Way PEBLO calculated on worksheet = High three base pay x 2 = 11000. Then he times by three. No idea why calculated this way but I will discuss with him. I will pass my tenth year in service this summer prior to my official separation.

I am not surprised.

"Even DFAS"
DFAS once erroneously showed I owed $5,000 in CRSC. They actually owed me a substantial amount.
They repaired the situation upon receipt of my letter.

I am not perfect either.

Ron

 

[MilitaryBlake]

If you take the severance, your VA pay will be reduced by approximately $280/month (because of your 20% rating) until the severance amount is paid in full. Once that occurs, you will receive your full VA pay.

As for CRSC, if your injuries are combat-related, then you should be arguing that up front to get that designation on your paperwork. That will make it easier to apply for the CRSC.

Can someone confirm this? Is it reduced by the amount posted above ~280 month (because I am rated @ 20% for DoD condition and this is 20% VA disability) or is my 100% reduced to 80% VA disability pay until total amount recovered? This would be a huge diff. b/c 80% VA pay is approx. 1900 (married with one dep.). The former case I would only be offset by 280 bucks whereas the other I would be offset approx. 1600$ = (~3500-1900)

Not that I don't trust you @ tdrecord it is just hard to believe they would only try to recover my severance at such a slow rate. based on the figures I gave prior it would take them over thirty years to recover it at 280 a month. Whereas if they decreased my VA reimbursement to 80% it would take just under 6 years for them to recover the $$.

 

[RonG]

Recoupment by the VA.

This is the VA's manual for recoupment:
Reference: M21-1, Part III, Subpart v, Chapter 4, Section B - Recoupment of Separation Benefits See this ---->LINK

Ron

 

[MilitaryBlake]

Great. Thxs Ron. Lots of stuff to go through here, but if I interpret all this correctly, then yes, it is recovered just as tdrecord stated. Which essentially means I might kick the bucket before the VA recovers this $$

 

[RonG]

Great. Thxs Ron. Lots of stuff to go through here, but if I interpret all this correctly, then yes, it is recovered just as tdrecord stated. Which essentially means I might kick the bucket before the VA recovers this $$

If I remember correctly, the manual provides some examples, using different scenarios. I remember a "Procedure A and Procedure B" (or similar terms). I look at that manual only occasionally, but I knew it included recoupment procedures.

Good luck,
Ron

 

[tdrecord]

Can someone confirm this? Is it reduced by the amount posted above ~280 month (because I am rated @ 20% for DoD condition and this is 20% VA disability) or is my 100% reduced to 80% VA disability pay until total amount recovered? This would be a huge diff. b/c 80% VA pay is approx. 1900 (married with one dep.). The former case I would only be offset by 280 bucks whereas the other I would be offset approx. 1600$ = (~3500-1900)

Not that I don't trust you @ tdrecord it is just hard to believe they would only try to recover my severance at such a slow rate. based on the figures I gave prior it would take them over thirty years to recover it at 280 a month. Whereas if they decreased my VA reimbursement to 80% it would take just under 6 years for them to recover the $$.

@MilitaryBlake, no problem...

You will receive your full VA amount (100%) less the 20% compensation you would receive for the condition the DoD rated at 20%. The VA compensation for a condition rated at 20% is approx. $280.00/month. Two entities of the Federal Govt. cannot pay you for the same condition, unless your condition is combat-related. You will receive the higher amount, less the part that would be a double-payment.

 

[RonG]

Recoupment of Disability Severance Pay

The manual for VA's actions are described in detail, including examples of recoupment computations, is at:

Reference: M21-1, Part III, Subpart v, Chapter 4, Section B - Recoupment of Separation Benefits See this ---->LINK

Ron

 

[MilitaryBlake]

@MilitaryBlake, no problem...

You will receive your full VA amount (100%) less the 20% compensation you would receive for the condition the DoD rated at 20%. The VA compensation for a condition rated at 20% is approx. $280.00/month. Two entities of the Federal Govt. cannot pay you for the same condition, unless your condition is combat-related. You will receive the higher amount, less the part that would be a double-payment.

Okay.... so here is a spin. I think my situation is weird. You say "two entities of the federal gov. cannot pay you for the same condition, unless....." The spin is that my DoD conditions are rated only at 20%, but my VA conditions are a 100% EVEN WITHOUT THE DOD CONDITIONS. I tried to explain this to my PEBLO, and I don't think he understood. Can I get both severance AND full VA because the condition for which I am being separated from the Army can be completely removed from the VA side of the house and I still reach 100% without those conditions...

 

[RonG]

Okay.... so here is a spin. I think my situation is weird. You say "two entities of the federal gov. cannot pay you for the same condition, unless....." The spin is that my DoD conditions are rated only at 20%, but my VA conditions are a 100% EVEN WITHOUT THE DOD CONDITIONS. I tried to explain this to my PEBLO, and I don't think he understood. Can I get both severance AND full VA because the condition for which I am being separated from the Army can be completely removed from the VA side of the house and I still reach 100% without those conditions...

Hello @MilitaryBlake,

Just an opinion, but from reading the VA manual, that does not appear to be an option. However, I doubt anyone who experienced that in the past remains with this board to discuss their experience.

On the other hand:

III.v.4.B.3.h. Example: VA Assigns a 100-Percent Disability Rating to a Non-Severance-Pay Disability

Scenario: In a decision on a Veteran’s original claim for benefits, VA awards SC for a severance-pay disability rated 50-percent disabling, and a non-severance-pay disability rated 100-percent disabling. Result: VA may not withhold any compensation to recoup the Veteran’s disability severance pay while the non-severance-pay disability is rated 100-percent disabling. Note: The result in this example is the same, regardless of whether or not VA assigned the 100-percent rating on a temporary basis under 38 CFR 4.28, 4.29, or 4.30.

I believe the manual is discussing ONE disability that is 100%. Recommend you visit with the VA on this matter.

Ron

 

[tdrecord]

Okay.... so here is a spin. I think my situation is weird. You say "two entities of the federal gov. cannot pay you for the same condition, unless....." The spin is that my DoD conditions are rated only at 20%, but my VA conditions are a 100% EVEN WITHOUT THE DOD CONDITIONS. I tried to explain this to my PEBLO, and I don't think he understood. Can I get both severance AND full VA because the condition for which I am being separated from the Army can be completely removed from the VA side of the house and I still reach 100% without those conditions...

Here’s the BLUF:

If you have a condition that both the VA & the DoD say are worth 20%, and the DoD gives you a severance check because it interrupted your military service, you have been paid by the DoD for that condition. The VA cannot then pay you a monthly compensation for that condition, regardless of your other conditions. The VA will deduct the compensation for that condition from what they pay you monthly until that severance check is paid in full.

My question to you is, What has your Soldiers Counsel said about this? You are talking to them, right?

 

[MilitaryBlake]

I meet with them later today. I will let you know.

Here is my exact situation. Perhaps this will clarify. Yes, I have a condition that is rated as 20% (per VA) that DoD states renders me unfit. Therefore they recommend severance. As you say, DoD will be paying for that condition.

On the VA side of the house, I have been rated as 100%. Yes, this includes the condition above for which DoD is rating me unfit. My question is, per VA ratings, I have 16 conditions given a rating and reach 100% at only condition 12. I can EXCLUDE the that which the DoD is paying me for, and not even be paid by VA for it, and still easily reach 100%. So NO double dipping. If the law exists to not pay twice for the same condition, then I am wondering if there is a way to exclude DoD condition from VA ratings, since I can top out any higher than 100% (which I get w/o the DoD rated condition). if not fair enough, but I really have not had anyone really articulate that to me.....

But I will get back later this afternoon after speaking to counsel....

 

[RonG]

Regarding, Recoupment of Disability Severance Pay:

1. See this ---->LINK

2.

III.v.4.B.3.i. Withholding an Amount That Is Most Advantageous to the Veteran

When calculating the monthly amount of VA compensation to withhold from a Veteran with both severance and non-severance-pay disabilities, always use the withholding that pays the Veteran the higher rate of compensation. Example: VA assigns a combined disability rating of 70 percent to a married Veteran based on a severance-pay disability rated 50-percent disabling, and non-severance-pay disability rated 40-percent disabling. Two methods exist for calculating how much of the Veteran’s compensation VA should withhold each month: [method one is the process discussed in this thread] Method 1: Withhold the amount of compensation payable for the severance-pay disability, to include the additional amount for a spouse. Method 2: Pay the Veteran the amount payable for the non-severance-pay disability, to include the additional amount for a spouse, and withhold everything else. Result: The table below shows the calculations for each of the two methods, using rates from the December 1, 2006, compensation rate table for a Veteran with a spouse only. Because Method 2 provides the Veteran with a higher rate of compensation in this example, use that method to determine how much of the Veteran’s compensation to withhold. Method 1 $1,232.00​ Start with the rate payable for a combined disability rating of 70 percent. - 781.00​ Withhold the amount payable for the severance-pay disability. 451.00​ Pay the remaining amount to the Veteran. ​ ​ Method 2​ $1,232.00​ Start with the rate payable for a combined disability rating of 70 percent - 556.00​ Pay the Veteran the amount payable for the non-severance-pay disability. 676.00​ Withhold the difference between the two rates.

Separate from that section and computation:
On the other hand:

III.v.4.B.3.h. Example: VA Assigns a 100-Percent Disability Rating to a Non-Severance-Pay Disability

Scenario: In a decision on a Veteran’s original claim for benefits, VA awards SC for a severance-pay disability rated 50-percent disabling, and a non-severance-pay disability rated 100-percent disabling. Result: VA may not withhold any compensation to recoup the Veteran’s disability severance pay while the non-severance-pay disability is rated 100-percent disabling. Note: The result in this example is the same, regardless of whether or not VA assigned the 100-percent rating on a temporary basis under 38 CFR 4.28, 4.29, or 4.30.

As mentioned earlier, I believe the text is referring to a single non-severance pay disability rated at 100%. That is conjecture on my part.

In any case, III.v.4.B.3.i. Withholding an Amount That Is Most Advantageous to the Veteran provides the basis for the recoupment amount often discussed in this forum.

---
Ron

 

[MilitaryBlake]

Hmmm.. very interesting. I will bring this exact reference to counsel this afternoon. As I read it, a NONSEVERANCE pay disability rating of 100% is exactly what I am referring to.

Again, TY Ron. But like I said, I will return this evening and report after meeting with counsel....

 

[MilitaryBlake]

Here’s the BLUF:

If you have a condition that both the VA & the DoD say are worth 20%, and the DoD gives you a severance check because it interrupted your military service, you have been paid by the DoD for that condition. The VA cannot then pay you a monthly compensation for that condition, regardless of your other conditions. The VA will deduct the compensation for that condition from what they pay you monthly until that severance check is paid in full.

My question to you is, What has your Soldiers Counsel said about this? You are talking to them, right?

Okay, I did meet with Counsel today. Sorry for all the confusion, and certainly not calling you "wrong" - I am confused myself. I can't be the only one in this situation..... VA recovery of funds seem commonplace.... even mandatory. But Counsel today actually told me just the opposite. He said that the VA will recover funds based on the DoD rating minus from the 100%. The actual rating, not the pay from the table. So, I am 100% VA, and 20% DoD. So, 100-20 = 80 and 80% gives me more or less 1900 a month. 3500-1900 a month = 1600 so they will be recovering that much. NOT - DoD rating of 20%, look it up in the table = 280 and that is the amount deducted - no.

Perhaps someone that has actually gone through the process can chime in and how their actual severance is recovered so we don't have to conjecture anymore. Anyone out there able to do this? For the record, my Counsel is actually a pretty reasonable and humble guy..... if he is wrong (according to him) he is more than willing to change his interpretation if there is some legitimate data out there for him to change his mind. Again, these are not trivial differences. In my case, the difference being recovered per month is 1600 vs. 280. One takes about 6 years the other takes around 47!!

 

[MilitaryBlake]

Regarding, Recoupment of Disability Severance Pay:

1. See this ---->LINK

2.

III.v.4.B.3.i. Withholding an Amount That Is Most Advantageous to the Veteran

When calculating the monthly amount of VA compensation to withhold from a Veteran with both severance and non-severance-pay disabilities, always use the withholding that pays the Veteran the higher rate of compensation. Example: VA assigns a combined disability rating of 70 percent to a married Veteran based on a severance-pay disability rated 50-percent disabling, and non-severance-pay disability rated 40-percent disabling. Two methods exist for calculating how much of the Veteran’s compensation VA should withhold each month: [method one is the process discussed in this thread] Method 1: Withhold the amount of compensation payable for the severance-pay disability, to include the additional amount for a spouse. Method 2: Pay the Veteran the amount payable for the non-severance-pay disability, to include the additional amount for a spouse, and withhold everything else. Result: The table below shows the calculations for each of the two methods, using rates from the December 1, 2006, compensation rate table for a Veteran with a spouse only. Because Method 2 provides the Veteran with a higher rate of compensation in this example, use that method to determine how much of the Veteran’s compensation to withhold. Method 1 $1,232.00​ Start with the rate payable for a combined disability rating of 70 percent. - 781.00​ Withhold the amount payable for the severance-pay disability. 451.00​ Pay the remaining amount to the Veteran. ​ ​ Method 2​ $1,232.00​ Start with the rate payable for a combined disability rating of 70 percent - 556.00​ Pay the Veteran the amount payable for the non-severance-pay disability. 676.00​ Withhold the difference between the two rates.

Separate from that section and computation:
On the other hand:

III.v.4.B.3.h. Example: VA Assigns a 100-Percent Disability Rating to a Non-Severance-Pay Disability

Scenario: In a decision on a Veteran’s original claim for benefits, VA awards SC for a severance-pay disability rated 50-percent disabling, and a non-severance-pay disability rated 100-percent disabling. Result: VA may not withhold any compensation to recoup the Veteran’s disability severance pay while the non-severance-pay disability is rated 100-percent disabling. Note: The result in this example is the same, regardless of whether or not VA assigned the 100-percent rating on a temporary basis under 38 CFR 4.28, 4.29, or 4.30.

As mentioned earlier, I believe the text is referring to a single non-severance pay disability rated at 100%. That is conjecture on my part.

In any case, III.v.4.B.3.i. Withholding an Amount That Is Most Advantageous to the Veteran provides the basis for the recoupment amount often discussed in this forum.

---
Ron

Okay, but here is the twist at least in my case. This kinda negates all my concerns for recovering funds (posted above) but I still want to f/u on the issue for a resource for others.

Ron, my attorney DID confirm what you mentioned and how I interpret the site you referenced. If, a SM is 100% VA rated without needing to include the condition(s) for which they are retired from their branch of service then the VA will not try to recover the severance pay. As mentioned by tdrecord the government will not pay you twice for a condition (unless combat-related, 20 yrs, etc). So, in my case, I have 20% DoD rating, and 100% VA rating. However, I reach 100% VA rating with several conditions left over. If I do not include my DoD rated cases, I can still reach a 100% VA rating. So, my Counsel confirmed that I will be able to obtain the severance pay and VA will NOT recover. I may be taxed for it, and they may not accept the waiver typically submitted after, because the money comes from the DoD side of the house and DoD $$ is taxed. But, perhaps not, because technically it is not RETIREMENT - attorney was not sure on the taxation issue but was certain that my severance would not, or should not be recovered.

Clear as mud? Concerns? Issues?