Medical Retirement vs a Severance

Discussion in 'Outcomes: Fit, Severance, TDRL, PDRL' started by towjumper, Jun 23, 2009.

  1. towjumper

    towjumper New Member

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    I just hit 17 years of active service and am currently undergoing the MEB/PEB from a back injury. It looks like I am going to receive 30 percent disability from the VA. My question is...Can I take the retirement at the 30 percent (or higher) and opt for the severance pay as opposed to the retirement pay? I know I'd lose money over the next 20 years but I am looking to pay off a lot of debt and start a business while still maintaining those ever important TRICARE medical benefits for my children as a retiree. Also I am being told that there are changes to severance? Now your base pay is calculated to 36 months as opposed to the old 24 months (This would benefit me greatly as I have 17 years in)?
     
  2. Jason Perry

    Jason Perry Benevolent Leader Site Founder Staff Member PEB Forum Veteran

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    towjumper,

    There is no basis for electing severance pay over retirement pay. If retired, you receive retirement pay.

    Yes, retirement pay for those with less than 20 years of active federal service is calculated as your disability award times your retired base pay (average of the high 36 months of base pay).

    Best of luck!
     
  3. towjumper

    towjumper New Member

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    I am referring to the severance pay formula. Under the old formula you calculated two months base pay per year up to 12 years for a max total of 24 months. I have been told that the max has been increased up to 36 months.

    Also for medical retirement I knew that your monthly retirement was calculated at retirement base pay x percentage of disability. I have also heard another formula. 2.5% x retired base pay x years of service.

    As far as being medically retired ie rated 30% or over and opting for a severance instead. I saw language in a chapter 61 update concerning CRSC applications (The 2008 National Defense Author). I am assuming that I am going to be a chapter 61 retiree..."A Chapter 61 retiree is anyone who was medically retired from military service under Chapter 61, Title 10 US Code." Reading further down it says, "Chapter 61 claimants that opt for a severance package are not eligible since they are not receiving retired pay, therefore there is nothing to offset." I'm interpreting this to say that a medically retired individual can opt for a severance and if they do so they render themselves ineligible to receive CRSC...

    Thanks for any help in advance
     
  4. Jason Perry

    Jason Perry Benevolent Leader Site Founder Staff Member PEB Forum Veteran

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    Actually, the max years are now 19, so it would be 38 months.


    This is an alternate calculation for those with 20 or more years of active federal service.

    The usual circumstance where you have a choice of opting for retirement or severance is for reservists with reserve retirement eligibility ("20 year letter") who are rated at 20% or less. These individuals may choose to elect their reserve retirement or the severance pay. However, if they do take severance, that is correct, they cannot receive CRSC.

    Glad to!
     

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