Severance pay and retirement Pay

Bizott

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If a service member receives a disability % higher than 20% does that exclude member from getting severance and if not is there a % that can be awarded by the board that eliminates member from receiving severance?

Thanks in advance....
 

Jason Perry

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Quick Question about Severance Pay and VA Pay

Bizott,

If you are awarded 0%, 10%, or 20%, you receive only severance. 30% of higher, you receive only retirement pay (with medical and other retiree benefits for you and eligible dependents).
 

Used to Be Army Strong

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okay jason
so what is the difference between 30, 40, 50, 60,....100% from the army? if they only give me 30% is it worth fighting for more if i feel like i deserve more? And even though they are not suppose to if the VA sees that you only got 30% does that make it more difficult to get 100% from them or a IU rating?
 

Jason Perry

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The difference is more money, up to 75%. Your retirement pay is calculated in most cases by multiplying the award times your retirement base pay. So, each increase gets you more money, up to 80% (which, because the law limits retired pay to 75% of retired base pay, is the highest you can get....but yields 75% only).

Now, it gets more complicated because for the majority of Servicemembers with less than 20 years of service, there is an offset from VA compensation each dollar gained from the DoD. So, for some, they will do fine at the VA and there is no benefit. However, if you qualify for CRDP or CRSC, you may double dip (in whole or in part) and thus it may be very beneficial to have a higher DoD rating.

So, why the big deal for fighting for DoD retirement? First off, the healthcare benefits for you and your family. A recent Government Accountability Office report pegged the value of this benefit after age 60 as approximately $175,000. So, the younger you are, the value of this benefit shoots up dramatically.

The other important reason to fight for a high rating from the DoD is that while most Veterans eventually end up with a higher rating than their DoD rating, this does not always happen quickly. It can take years to sort out a VA claim (and it is sometimes the case that the higher rating is a result of a condition deteriorating over time). The DoD rating pays out immediately, so it can be an important source of income while you transition (and in some cases appeal the VA rating decision). Also, remember, with the exception of TDRL, DoD ratings are permanent. So, even if you get better, you keep the benefit. The VA will reduce awards if you recover.

Theoretically (and excepting the DoD/VA Pilot program) the two systems are not bound by each others decisions. But, anecdotally, I believe that a higher rating in one system will tend to help a rating in the other system. Now, this would be very hard to tease out if there is a cause and effect relationship or it is just because the seriously injured deserve high ratings from both systems. My opinion is that it is best to have a rating as high as possible from both systems.
 

Used to Be Army Strong

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thank you for all the helpful information i don't imagin I was the only one that wasn't sure about that. How would I go about finding out how to get the "Double Dip" going on? Also another question I think others would benefit from is. How exactly should we go about figureing out what feel would be a correct rating? I mean I know Im tore up from the floor up now. Letter after letter saying I am not self sustained anymore people have to take care of me because all my stuff. The WTB that im in wont give me a volenteer job because i am to undepenable and so forth so. what should i be looking for on the DOD side and then the VA side? How do I go about determining in my head what i deserve?
 

surfer495

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PEB Forum Veteran
This severance pay nonscense is really messing me up. I understand the way everything is calculated. I just don't understand the way it is taken back. Lets say I get $15,000 for severance and was rated at 10%. Would I pay back just 10% of my severance pay, or the entire amout received?
 

Jason Perry

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You have to "pay back" the entire amount. I put that in quotes, because you have the option of cutting them a check or having your monthly VA compensation amount subtracted to from the debt until the balance is down to $0.
 

builtgypsy

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Jason, you only have to pay back --or wait until the monthly payments would add up to-- the after-tax amount, or did I understand that wrong?
 

Jason Perry

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No, the full amount. However, separation pay from the military should end up being non-taxed (through IRS refund) after the VA award (or initially if there are finding of combat-related injury at the PEB).
 

surfer495

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Oh alright that makes much more sense. Now, I was also under the impression this was to be taxed at a very high rate. This this a newer change?
 

Sylaroth86

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I was discharged in January after being diagnosed with Multiple Sclerosis. I was rated at 30 percent and placed on TDRL. It's been three months and I haven't recieved any compensation whatsoever. Can anyone point me in the right direction here? I was in texas but now I am living in arkansas and life is a tad bit rough without the compensation I was entitled to....anyone?
 

Jason Perry

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Call DFAS. That is most likely where the hold up is or at a minimum can be identified. Otherwise, I would call the transition point and see if there was some problem with your outprocessing. If none of that works, let us know.
 

PFS 4 Life

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I'm still REALLY confused...I'm "expected" a 10 or 20 % discharge with severance. You're telling me, even though I'm entitled to that money, as soon as I register with the VA for my disability benefits, they're going to take back my original entitlement....? So, what are my choices here? DONT register with VA and keep my 20k, or.....?

Thanks in advance.
 

Jason Perry

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You want to go to the VA as soon as possible. This is why.

Say the military gives you $12,000, and you are separated. If you apply to the VA within a year, they will back date your service connected awards to the day after you left service. So, if your entitlement from the VA turns out to be $1000 (I am using round numbers to keep this simple) and is awarded after a year. Since it is backdated you will get $12,000 credited. Your net "debt" is now $0, and the following month, you start receiving your $1000 a month.

Now, same facts as before, but you wait 13 months to file a claim. The VA finds takes 6 months to adjudicate your case and awards you the same $1000 with an effective date of 13 months after your discharge. At this point you have to wait an additional 6 months of having your $1000 offset, so it is not until month 25 after you left service that you start to receive your monthly compensation.

This was a simplification of how this works out. There are rules about how much can be recouped out of compensation, but this explains the basic principle. Overall, it is to your advantage to go to the VA soon.
 
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