Calculating years to repay Severance Pay to VA

hawkdrivermtp

hawkdrivermtp

PEB Forum Regular Member
PEB Forum Veteran
My PEBLO had an excel document that calculated your severance pay based on years of service, base pay, rank, VA %, etc... Wish I had that document but it is fairly simple to determine as long as you know your base pay and years of service.

If anyone wants to find out how many years it would take to repay a military severance, if required, here is how you determine the years you will be "repaying" the VA.

2 x (Monthly Base Pay) x (Years of Service...up to 19 years) = SEVP

2 x $5040.60 x 14 = $141,136.80 SEVP

Finance will take 25% of your SEVP for tax purposes unless your DA 199 has a code of 10a/b/c. If you have a code 10d, your severance will be taxed, however you are able to recover those taxes either through DFAS or the IRS during tax season. I recommend going the DFAS route.

$141,136.80 x .25 = $35,284.20 (estimated amount taxed since my DA 199 has a code of 10d.)

There are two possible percentages that the VA will use to determine how many years it will take to repay your severance if you do not meet requirements on line 10 of your DA 199. It's either at 10% or 20%. A 0% DoD rating still gives you a severance based off the above formula, but you will never repay the VA for a 0% rating.

VA 10% (SEVP divided by $108.00 divided by 12 months = # of years to pay back): 108.9 years to pay back!

VA 20% (SEVP divided by $210.00 divided by 12 months = # of years to pay back): 56 years to pay back.

I am not sure how the $108.00 and $210.00 values are determined, but they were already part of the formula and didn't change. Luckily, I don't have to repay any of my severance back! If I had been given a 10% DoD rating, The VA would have had a hard time collecting from me for 108.9 years, but they might have been able to get every cent back if I was rated at 20% DoD and my injury hadn't occured in Iraq. I would still have to live to be 80 though for that to happen. Of course none of this matters since 21 DEC 2012 is almost here. Kidding!

I figured some people could use this tool to help determine ahead of time, how much the VA will be paying you and how much you might have to pay the VA back over time. All this information was given to me when I signed my DA 199 and the same should go for everyone else, but if you just want to mess around with the numbers, feel free to do so! Hope this helps!
 
I was rated 10% by the military for major depressive disorder, mild, in partial remission. I got disability severance, and a discharge after ten years of active duty. After I got out the VA rated me for PTSD and major depressive disorder combined at 70% (my total rating was 90%) and last week the VA upon themselves deemed me "individually unemployable", bumped me up to 100% permanent and total based on the IU, and sent me all the stuff for Chapter 35 benefits.

When/if they figure out I received severance will they recoup it at the 10% rating the military initially gave me at my MEB? Or is the recoupment based off of the first rating you receive by the VA?

There is a big difference in between the two. They also backdated my IU rating to the date of discharge so now I am freaked out because I have been looking for work and filing unemployment for the last year. I didn't ask to be rated IU they just did it on their own.

Now I am afraid of the following:

1. That the VA is going to take 70% of my disability compensation based on their first rating of my condition of 70% and not the 10% I received by the MEB prior to my discharge.

2. Since they back dated my individual unemployable to my date of discharge that I am going to have to repay back the 12 months of unemployment I have been on because I have been legitimately looking for work.

3. I had my first job interview in 14 years two weeks ago via the wounded warrior program to work for a Congressman. The next day I got the letter in the mail stating that the VA had deemed me individually unemployable.

I am going to be in an extremely bad position, through no fault of my own, if they recoup the severance, expect me to pay back the year worth of unemployment benefits, and I can't except this once in a lifetime opportunity to work through the wounded warrior program. The wounded warrior position might be considered "sheltered employment" and I might be able to take it after being deemed individually unemployable since it is specifically designed for wounded warriors, flexible schedule for medical appointments, etc. and is not like a typical job.

I am pretty much one week away from having a serious heart attack over this crazy situation. If I can't take the job, the VA does recoup at the 70% rate, and because they deemed me individually unemployable I have to pay back over 12 months worth of unemployment - I am 100% absolutely screwed and will be homeless without a doubt.
 
The VA will only recoup the 10% you were giving severance for. It doesn't matter what the VA does after you are out. I am pretty sure my conditions I was given severance for will be bumped up to a higher rating once I can file that new claim. As far as unemployment goes, you were looking for work and I honestly do not believe they would take that all back. You might want to ask both the VA and the Unemployment Offices, but I think you should be safe. And I believe you can tell the VA you don't want to be on the IU list because you do want to work. Seems odd they would do it automatically, but stranger things have happened. Try not to stress though, your severance would only be payed back at the 10% rating, and I really don't think they can take back your unemployment monies. If anything, if the VA is paying you all the way back to discharge, that amount might end up being more than you ever received on unemployment and if Unemployment recouped anything, you should still have more left over from the back pay from the VA. Just something to think about.
 
Guys I confused , Iam going Thur this now 18 years 7 months if I get separated due to medical, and get a Severances I will not be able to get a VA check . I will be over 19 years when I finish the PEB Iam fighting to stay in but Iam trying to find out what I should be receiving.
 
Pitsnipe,

Your disability percentage, which will be assigned by the Physical Evaluation Board, will determine whether your disability qualifies you for retirement or separation:

--If you have less than 20 years of active service a disability rating of 30 percent or higher will qualify you for retirement, and a disability rating below 30 percent will result in separation.

--If your disability is found to be permanent and is rated at 30 percent or greater, or you have 20 or more years of service, you will be placed on the Permanent Disability Retired List (PDRL).
Your retired pay will be computed using one of two methods.
a. Your disability percentage, referred to as Method A.
b. Your years of active service, referred to as Method B.
Your pay will be computed based on whichever method is more beneficial for you.

--Separation may occur with entitlement to disability severance pay or without.
a. You must meet all of the following requirements to be eligible for severance pay:
be found unfit for duty,
have less than 20 years of service,
and have a disability rating of less than 30%.

b. If you were discharged with severance pay, you cannot go back on active duty or choose to apply for retirement later. However, you may be eligible to apply for monthly disability compensation from the Department of Veterans Affairs (VA) if the VA determines your disability is service-connected.

c. 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. Prior to January 28, 2008, a maximum of 12 years and minimum of three years creditable service was used.

Ref: https://www.dfas.mil/retiredmilitary/plan/separation-payments/disability-severance-pay.html
 
So I'm probably going to get med boarded due to knee issues, but I have 2 questions about this process. 1st will the fact that I was wavered into the army for a prior surgery keep me from getting any form of benefits l? 2nd if I get benefits, does the army ever factor in years remaining on your contract into severance pay? I just reenliated for 6 more years. But I'll only get a small chunk in severance according to the calculation your supposed to use.
 
I received a severance pay from Active Duty in 2011. But was given the option to join the Army Reserves. My MRD is 2026. I am going to start my disability in a few months. I am trying to figure out how long it would take me to pay back my severance pay before I can draw disability.
 
Teressalynn said:
I received a severance pay from Active Duty in 2011. But was given the option to join the Army Reserves. My MRD is 2026. I am going to start my disability in a few months. I am trying to figure out how long it would take me to pay back my severance pay before I can draw disability.
Click to expand...

VA deducts disability severance compensation from any VA compensation for the same disability to which the member or member’s dependents become entitled under any law administered by VA. There are two exceptions:

a. VA will make no deduction in the case of disability severance pay received by a member for a disability incurred in the line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Secretary of Defense.

b. VA will make no deduction from any death compensation to which a member’s dependents become entitled after the member’s death.

See the following for VA procedures for recoupment:
M21-1, Part III, Subpart v, Chapter 4, Section B - Recoupment of Separation Benefits

https://www.knowva.ebenefits.va.gov...tion-B---Recoupment-of-Separation-Benefits#3g


Generally, the VA will recoup at the rate VA comp is paid for the severance pay disability rate. Example: 20% was basis for severance pay = 20% rate for recoupment.

Examples: The table below contains examples of VA recoupment of disability severance pay after a change in rating.



If VA initially rated the severance-pay disability …​
And VA subsequently …​
Then VA continues to withhold from the Veteran’s monthly compensation …​

20-percent disabling
rates the same disability 30-percent disabling
the amount payable for a disability rated 20-percent disabling.

50-percent disabling
assigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30
the amount payable for a disability rated 50-percent disabling.

0-percent disabling
assigns a temporary 100-percent rating to the same disability under 38 CFR 4.28, 4.29, or 4.30
nothing, until it assigns the disability a compensable rating.



Notes:

The Exception and Examples in this block assume the Veteran received disability severance pay for all of his/her SC disabilities. If the Veteran has other SC disabilities for which he/she did not receive disability severance pay, see M21-1, Part III, Subpart v, 4.B.3.g-i.

Upon the assignment of a compensable evaluation (other than a temporary 100 percent rating under 38 CFR 4.28, 4.29, or 4.30) to a severance-pay disability that was initially rated 0-percent disabling, send a notice of proposed adverse action to the Veteran before reducing his/her benefits.


Ron
 
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