Severance Pay Clarification

bcbberry

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
I've done some research and can't seem to get a straight answer. I spoke with DFAS and they weren't helpful and told me they didn't know the answers to several of my questions. I'm coming off TDRL. I will be receiving severance. Maybe someone who has received a severance can clarify a few things for me.

I received a paper from the PEB during my reevaluation that said if I were separated, the severance would be calculated using my time in service which would be rounded up if over 6 months into the year ie. 6 years 7 months would be rounded up to 7 years for calculation purposes. I've been reading here and a few other places that this hasn't been the case for some.

My next question being what base pay is used? The base pay at the time I went on TDRL 2017, or the year I discharged, 2019?

Lastly, has anyone coming off TDRL been able to submit paperwork and avoid taxes being taken out initially? My orders state my severance will be tax free because I receive VA compensation and I need to submit my VA award letter to avoid taxes being withheld but when I talk with DFAS, they told me that they think it'll be taken by default and then I'll have to submit for a refund. But no one at DFAS in the retirement department could give me an actual yes or no. Everything was I'm not sure or maybe.

I'm just looking for a clear answer from someone who has experience with it, even if you can only answer one part. Thanks everyone!
 

lucky208

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
Hi-

(Q): My next question being what base pay is used? The base pay at the time I went on TDRL 2017, or the year I discharged, 2019?
(A): Pay is based off your separation from active duty/ TDRL date- the day you entered into retirement. Time spent in retirement doesn't count toward your separation pay calculation.

(Q): Lastly, has anyone coming off TDRL been able to submit paperwork and avoid taxes being taken out initially?
(A): Not sure but @RonG has provided numerous responses to this topic on multiple occasions, search and you'll probably find your answer.
 
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