If you get medically discharged after receiving the CSB/REDUX you do not have to pay it back nor will it be "extracted" from your severance package/medical retirment.
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Strategically, if one has medical issues near your 15th year and could make it to their 15th year(without being boarded) but probably not their 20th year, one would be wise to take the REDUX. That would be extra cash for you & your family above and beyond any medical retirement/severance. Heck it would be 100% tax free [if] you rolled it in to your TSP. (your doing the TSP right!)
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IF A MEMBER FAILS TO SERVE CONTINUOUSLY ON ACTIVE DUTY UNTIL
HIS 20TH ANNIVERSARY, THE LAW STIPULATES THAT A PROPORTIONATE SHARE
OF THE CSB MUST BE REPAID. SECDEF HAS WAIVED BONUS REPAYMENT IF A
MEMBER DIES ON ACTIVE DUTY, IS SEPARATED OR RETIRED AS A RESULT OF A
PHYSICAL DISABILITY UNDER CHAPTER 61 OF TITLE 10 U.S. CODE, OR
SEPARATED UNDER A SERVICE OFFER FOR EARLY RETIREMENT (SUCH AS TERA)
OR SEPARATION PROGRAM. THIS WAIVER IS NOT AVAILABLE IF A MEMBER IS
SEPARATED DUE TO MISCONDUCT OR IF THE WAIVER WOULD BE INCONSISTENT
WITH OTHER PRESCRIBED LAW, REGULATION, OR POLICY.
X
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Strategically, if one has medical issues near your 15th year and could make it to their 15th year(without being boarded) but probably not their 20th year, one would be wise to take the REDUX. That would be extra cash for you & your family above and beyond any medical retirement/severance. Heck it would be 100% tax free [if] you rolled it in to your TSP. (your doing the TSP right!)
---
IF A MEMBER FAILS TO SERVE CONTINUOUSLY ON ACTIVE DUTY UNTIL
HIS 20TH ANNIVERSARY, THE LAW STIPULATES THAT A PROPORTIONATE SHARE
OF THE CSB MUST BE REPAID. SECDEF HAS WAIVED BONUS REPAYMENT IF A
MEMBER DIES ON ACTIVE DUTY, IS SEPARATED OR RETIRED AS A RESULT OF A
PHYSICAL DISABILITY UNDER CHAPTER 61 OF TITLE 10 U.S. CODE, OR
SEPARATED UNDER A SERVICE OFFER FOR EARLY RETIREMENT (SUCH AS TERA)
OR SEPARATION PROGRAM. THIS WAIVER IS NOT AVAILABLE IF A MEMBER IS
SEPARATED DUE TO MISCONDUCT OR IF THE WAIVER WOULD BE INCONSISTENT
WITH OTHER PRESCRIBED LAW, REGULATION, OR POLICY.
X