how to calculate severance pay

MilitaryBlake

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PEB Forum Veteran
Registered Member
Sorry for how obvious this question sounds. In a nutshell, I get the formula. Base pay*2 times years in service. Got it.

However, just completed my Capstone ending interview (to complete SFl-TAPS) and it was noted I had 13 years of service. I thought I only had 10. I have ten in terms of when I began AD service. However, i did obtain a military scholarship while in school for which I received pay. Scholarship was three years which obviously brings me to 13.

Does this mean that all 13 years will be used to calculate my severance?
 
Severance Pay.

As you have read, 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.

The question is actually does a military scholarship while in school for which I received pay count as part of the service time used for retirement purposes?

Findings.

USAR assignment status and administrative jurisdiction Notes: * ROTC cadets participating in the Simultaneous Membership Program (SMP) are credited retirement points. All other cadets, upon commissioning, will not be credit retirement points. In computing length of service for any purpose, an officer appointed through the ROTC program may not be credited with enlisted service for the period covered by his or her advanced training (10 USC 2106(c) and 10 USC 2107(g)).

The Simultaneous Membership Program (SMP) allows students to attend Army ROTC and serve in the U.S. Army Reserve or Army National Guard at the same time. ... During this time, SMP Cadets can earn Reserve/Guard pay and benefits in addition to the Army ROTC allowances

Also related-- 10 U.S. Code § 971. Service credit: officers may not count service performed while serving as cadet or midshipman. However, this does not preclude the crediting of such service for the purposes of determining the eligibility of an enlisted member to retire under 10 u.s.c. 8914.


Ron
 
Thanks Ron. However, I am afraid this is all a little to dense for me, not to mention open up to interpretation.

What I am looking for is perhaps any word from other Soldiers in terms of how close their DD214 was to the information read to them in their Capstone brief in terms of years of service. This may sound like a nuanced difference but for my family and I am it quite significant and will help as we plan for the future.
 
@MilitaryBlake
Hello,

I understand perfectly. I spent about 45-60 minutes on the subject and still did not come away with a firm grasp of how it applies.

Regarding other soldiers: Unfortunately, one of the characteristics of this board is the "one and done" feature. Most seem to arrive with a question...receive an answer...then adios.
I belong to another board where the participating members are primarily old timers, but rarely have I see a severance pay issue there. Professionally, I never saw a severance pay situation while on active duty. I am not sure if they existed. I did compute a "Readjustment Pay" payment in Germany in 1972, but obviously that is not the same.

Here is a DFAS tool you might use: https://corpweb1.dfas.mil/askDFAS/welcome.action <---LINK

Please share any clarification you might discover.

I will continue to search for more info today (periodically).

Ron
 
Also...

Re: "...and it was noted I had 13 years of service. "

How was this presented (a summary of points divided by 360; 1405 time; active federal service; etc.)?

What was the document type?

I have 25 years of "service" but not all of it applied to my retirement multiplier.
AD: October 1966 to August 1968
Inactive reserves: September 1968 to August 1970 ( includes 2 weeks AD in 1969 for training)
AD: September 1970 to August 1991.
Summary: I had 25 years for pay purposes (over 24 on the pay charts), but 22 years 9 months for active duty and computation of longevity. I did not have documentation for the two weeks in 1969 and it made little difference anyway.

Ron
 
Hello,

The reason I have brought up "retirement credit" or service creditable for retirement is that it applies to the service used for determining one of the components of the severance pay formula.

1980: The Department of Defense asked GAO to determine if a member can count his cadet time spent in a Military Academy for retirement purposes.

"GAO held that service as a cadet or midshipman at a service academy is creditable for the purpose of determining eligibility for retirement under enlisted retirement but is not creditable for a member retiring under commissioned officer retirement." Retirement Credit for Academy Service As A Cadet or Midshipman <---LINK
This begs the question: "Why would ROTC service be treated differently (i.e., award credit toward retirement from ROTC time?"

The basis for that decision is at https://www.gao.gov/assets/690/686866.pdf <---LINK
.. DECISION THE COMPTROLLER GENERAL OF THE UNITED STATES ~ WASHINGTON, D.C. 20548 FILE: B-195448 DATE: April 3, 1980 MATTER OF: Retirement credit for academy service as a cadet or midshipman DIGEST: Section 971 of title 10, U.S. Code, provides that cadet or midshipman service at a service academy may not be included in the computation of length of service for any purpose of an officer. 10 U.S.C. 971. However, this does not preclude the crediting of such service for the purposes of determining the eligibility of an enlisted member to retire under 10 u.s.c. 8914. Service as a cadet or midshipman at one of the academies is service in the Navy, Army, or Air Force since the academies are integral parts of those services.
[copied from a scanned document (probably via OCR, optical character recognition). ]

Added:
Reference: DoD 7000.14-R Financial Management Regulation Volume 7A, Chapter 35 * October 2018
350303. Computation of Active Service
"F. Do not include service as a cadet or midshipman while in a military service academy or a Reserve Officer Training Program"
Note: This was in the 3503 SEPARATION PAY (NON-DISABILITY) section, which does not include Disability Severance Pay. It is cited only to provide an example of how ROTC time is considered for separations other than disability.

3505 DISABILITY SEVERANCE PAY

B. Years of Service.
The member’s separation orders will specify the total combined years of active service and inactive duty points to be counted in computing severance pay. Round this total to the nearest whole year, with 6 months or more rounded up. The maximum number of years of service for computing the disability severance pay will be 19 years. The minimum number of years for computation purposes will be: 1. Six years in the case of a member separated from the Armed Forces for a disability incurred in the line of duty in a CZ (as designated by the SecDef) or incurred during the performance of duty in combat-related operations as (designated by the SecDef); or 2. Three years in the case of any other member.
Example: An E-6 has 11 years, 4 months, and 9 days of active service and 76 inactive duty training periods (points) on the date of separation for physical disability. Compute the entitlement as follows: 11 years, 4 months, 9 days = 11.3583 years 76 points / 360 = .2111 years Total Service = 11.5694 years Since it is a decimal greater than or equal to .5, round the total upward to 12 years. 12 years times 2 months of basic pay of an E-6 over 10 equals the amount of disability severance pay. NOTE: For purposes of this calculation, the number of points that may be considered may not exceed 60 points for any anniversary year that closed before September 23, 1996; 75 points for anniversary years that closed on or after September 23, 1996; 90 points for anniversary years that close on or after October 30, 2000; and 130 points for anniversary years that close on or after October 30, 2007.

Ron
 
I have a question. So I was rated at 0% dod and 50% VA. I was told that I won’t have to pay back my severance pay due to my referee condition being rated at 0%. Is that true and will I be able to get my severance check and my 50% VA money every month?
 
I have a question. So I was rated at 0% dod and 50% VA. I was told that I won’t have to pay back my severance pay due to my referee condition being rated at 0%. Is that true and will I be able to get my severance check and my 50% VA money every month?
It depends on whether the zero percent was also rated by the VA and you receive VA compensation for it.

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


III.v.4.B.3.b. General Policies Regarding Withholdings to Recoup Disability Severance PayGenerally, if a Veteran received disability severance pay, VA must withhold from his/her monthly compensation an amount equal to the monthly compensation payable for the disability(ies) for which the Veteran received disability severance pay. VA continues to withhold this amount until it has recouped the amount specified in M21-1, Part III, Subpart v, 4.B.2.d.

Important:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).
  • If a Veteran has multiple, severance-pay disabilities, each rated 0-percent disabling, and VA assigns a 10-percent disability rating to them under 38 CFR 3.324, no withholding is necessary for these disabilities until VA assigns a compensable rating to one or more of them, individually.
  • Withhold the additional benefits payable because of application of the bilateral factor if
    • the initial, compensable rating included application of the bilateral factor, and
    • entitlement to the bilateral factor was based exclusively on severance-pay disabilities.
Ron
 
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