This is related to the comment, "Didn't get the retirement but will end up getting about $125K in severance tax free plus the $1600ish monthly from VA. Zero percent is better than 10-20. Don't have to pay back medical severance pay with a 0% dod rating."
That seems to be incomplete and having a zero DoD rating is immaterial if VA compensation is paid.
The VA deducts disability severance compensation from any VA compensation for the
same disability to which the member or member’s dependents become entitled.
The two exceptions for non-recoupment of severance pay when receiving VA compensation are
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
See
350506.
Recoupment From VA Compensation
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.
DoD 7000.14-R
Financial Management Regulation
Volume 7A, Chapter 35
3505
DISABILITY SEVERANCE PAY
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
Ron