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I HAVE CRACKED THE CODE

GeneralStinkyLegCheeseMan

New Member
Registered Member
I have found the recoupment loophole for combat severance peeps granted retirement under Chapter 61:

M21-1MR, Part III, Subpart v, Chapter 4, Section B
"If a Veteran becomes entitled to retired pay after receiving separation benefits, DoD must recoup the separation benefits it paid to the Veteran from his/her retired pay. If these same separation benefits are subject to recoupment by VA because of the Veteran’s entitlement to disability compensation, VA and DoD become mutually responsible for their recoupment.
Exceptions:
DoD is not responsible for recouping a retired Veteran’s separation benefits if the Veteran waives his/her retired pay in order to receive disability compensation."


Okay, so this puts the ball in VAs court. But wait, they can't recoup because:

"PL 110-181, as implemented in 38 CFR 3.700(a)(3), prohibits the recoupment of disability severance pay from VA compensation if the Veteran separated from service on or after January 28, 2008, and incurred the disability for which he/she received disability severance pay in the line of duty in a combat zone or during combat-related operations."

Say whaaaaaaat? The law prevents recoupment from VA Compensation for combat stuff? That puts it back to DFAS. What does the comptroller have to say about recoupment for combat disabled chums?

"The DFAS will subtract the gross monthly amount of the VA disability compensation from the gross monthly amount of the retired pay subject to recoupment. The DFAS will then use this adjusted gross retired pay in place of gross retired pay for members with a VA waiver. In cases where the amount of the VA disability compensation award is greater than military retired pay, recoupment of disability severance pay will be suspended until, when or if, the amount of gross retired pay exceeds the monthly VA disability compensation except as provided in paragraph 041003"

DoD won't collect unless the amount of retirement is higher.

Waive retirement for disability + keep disability higher than retirement ='s profit$$$$$$$

Feel free to ask me any questions, I have ascended beyond space and time.

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RonG

PEB Forum Regular Member
PEB Forum Veteran
Lifetime Supporter
Registered Member
This is not new.

The so-called "loophole" argued above does not exist for most Chapter 61 retirees.

A decision to either retire or separate a member for unfitting conditions is made during the MEB/PEB process.

A service member who is found to have unfitting conditions will be separated or retired under Chapter 61 will receive one of the two payments shown below:
—Rating of 30% or more = medical retirement
—Rating 20% or less = disability severance pay
The benefit is effective immediately upon separation or retirement.

This was cited, but the words "after receiving separation benefits" evidentially was overlooked.
"M21-1MR, Part III, Subpart v, Chapter 4, Section B"
"If a Veteran becomes entitled to retired pay after receiving separation benefits, DoD must recoup the separation benefits it paid to the Veteran from his/her retired pay. If these same separation benefits are subject to recoupment by VA because of the Veteran’s entitlement to disability compensation, VA and DoD become mutually responsible for their recoupment.”

Comment: This type situation (above) usually arises after a retroactive correction to military records.
——-


Recoupment of Severance Pay
1. DoD 7000.14-R Financial Management Regulation Volume 7A, Chapter 35
LINK <---

350506. Recoupment From VA Compensation
The VA deducts disability severance compensation from any VA compensation for the same disability to which the member or member’s dependents become entitled. There are two exceptions:
A. No deduction will be made in the case of disability severance pay received by a member for a disability incurred in the line of duty in a CZ or incurred during performance of duty in combat-related operations (as designated by the SecDef); or
B. No deduction will be made from any death compensation to which a member’s dependents become entitled after the member’s death

350507. Other Benefits and Claims
A member who is paid disability severance pay is not entitled to any payment from the military service for, or arising out of, service performed by the member before separation. This does not prohibit payment if an amount is due the member on the date of separation or if a claim is allowed under law.
----------------------

2. M21-1, Part III, Subpart v, Chapter 4, Section B - Recoupment of Separation Benefits
LINK <---

III.v.4.B.3.e. Disability Severance Pay for Disabilities Incurred in a Combat Zone or During Combat-Related Operations

PL 110-181, as implemented in 38 CFR 3.700(a)(3), prohibits the recoupment of disability severance pay from VA compensation if the Veteran
  • separated from service on or after January 28, 2008, and
  • incurred the disability for which he/she received disability severance pay in the line of duty in a combat zone or during the performance of duty in combat-related operations.
Exception: The provisions of this block may apply to a Veteran who separated from service prior to January 28, 2008, if
  • the Veteran incurred a disability in the line of duty in a combat zone or during the performance of duty in combat-related operations, and
  • DoD subsequently
    • placed the Veteran on the Temporary Disability Retirement List (TDRL)
    • later removed the Veteran from TDRL on or after January 28, 2008, and
    • awarded the Veteran disability severance pay for the same disability.
Important:
  • Prior to August 5, 2014, the “combat-related operations” requirement was met only if the disability in question was the result of armed conflict. On or after this date, the requirement is met if the disability is combat-related.
  • DoD – not VA – decides whether a disability was incurred in the line of duty in a combat zone or during combat-related operations.
Reference: For more information on determining whether DoD paid disability severance pay that is not subject to recoupment under 38 CFR 3.700(a)(3), see M21-1, Part III, Subpart v, 4.B.3.f.

Ron
 
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