10 USC 1174 ISP and disability

[danwest]

What is the name of your state (only U.S. law)? Virginia

According to 10 USC 1174 paragraph (h)(2), it states:
A member who has received separation pay under this section,
or severance pay or readjustment pay under any other provision of
law, based on service in the armed forces shall not be deprived, by
reason of his receipt of such separation pay, severance pay, or
readjustment pay, of any disability compensation to which he is
entitled under the laws administered by the Department of Veterans
Affairs, but there shall be deducted from that disability
compensation an amount equal to the total amount of separation pay,
severance pay, and readjustment pay received, less the amount of
Federal income tax withheld from such pay (such withholding being
at the flat withholding rate for Federal income tax withholding, as
in effect pursuant to regulations prescribed under chapter 24 of
the Internal Revenue Code of 1986). Notwithstanding the preceding
sentence, no deduction may be made from disability compensation for
the amount of any separation pay, severance pay, or readjustment
pay received because of an earlier discharge or release from a
period of active duty if the disability which is the basis for that
disability compensation was incurred or aggravated during a later
period of active duty.

My question is, how does my severance from the Navy and disability from the VA linked? why is my disability going to repay my severance?

 

[FFuries]

Why? Because the law states you can't be paid twice for the same period of service. You are going to be receiving VA disability for the time period you were in the Navy. You are claiming that the condition you are to receive disability for is due to your military service. The VA will ask if you received separation/severance pay and then withhold as needed.

A member who receives separation pay, and who also is eligible for disability compensation from the VA, will repay an amount equal to the total amount of separation pay received from the disability compensation awarded. No deduction for separation pay shall be made from disability compensation based on service performed after the separation pay was received. The VA recovers the Net, after tax amount, where as DFAS would recover the Gross, before tax amount.

Here's my case:

Received $12000.00 in separation pay from AF, went right into the Reserves. My contact states that if I later qualifiy for a military length of service retirement (LOS) I must pay back that amount. When I was medicallt retired after 23 years, DFAS started withholding $1500.00 a month to recoup that. After 4 months they suspended that recoupment for legal review. Then I qualified for VA disability, gave up the AF disability, and still owe the AF around $6000.00. Which will be paid back once I get my LOS retirement at 60 or if they pass Concurrent Receipt of Disability Pay for Chapter 61 retirees. My saving grace is that I have the law/rule in my favor now.

No deduction for separation pay shall be made from disability compensation based on service performed after the separation pay was received.

My disability is based on service in the Reserves 1996-2008, not my Active Duty service 1986-1996.

 

[danwest]

I still don't understand why this is. I am being involuntarily separated and the severance is what they are giving me for not finishing out my enlistment. How does that tie into the disability that I would qualify for? I am currently still in the Navy and just don't understand.

 

[FFuries]

Ok the military gave you "X" dollars in separation pay, now you are going to get a disability rating from the VA for the same period of time.

Uncle Sam already paid you for those years served with:

A) Your military pay at the time you served.
B) Your separation pay.

Now based on that service the VA is going to give you a monthly disability.

The law says, you can't be reimbursed twice for the same period, since separation pay and VA disability are the reimbursements per-se, it's one or the other but not both. The VA rules on the amount they can recoup per month is unknown to me, but you are probably looking at no VA checks until the amount paid is recouped. Remember per the reference you quoted, you are not being denied disability compensation, since they have given you a disability rating.

I don't know how else to explain in to you, it's just the way the law is. There has been many veterans affected by this, and we all figure it out. Saying that does not mean I agree with it, but that is the way it is right now. Since you haven't been paid your separation pay yet (I assume), then you just don't spend it and do a lump sum repayment to the VA, that way you will get your monthly VA payments in full.