Involuntary Seperation pay being withheld by the VA & DFAS

SSG. Kay

PEB Forum Regular Member
Background; Was involuntary separated from the Marines due to high year tenure in 1995 and received a involuntary sep's payment of $25,773.11 (before taxes) of which the VA has recovered $9,659.87 so far.

Now, in 2000 I joined the National Guard and was deployed to Iraq twice. I was injured during my second tour and went through a PEB. Was given a rating of 50% PDRL 10 a/c (due to combat) and retired on 25th of Dec. 2008.

I received an RAS from DFAS showing that they are withholding my retired pay (after the SBP) until the separation pay I received in 1995 is payed back. I faxed them proof from the VA showing when and how much they (VA) already withheld and are withholding now from my compensation. In the fax I requested that DFAS discontinued withholding my retirement payment.

I just got off the phone with DFAS and was informed that yes they did receive my fax and they had recalculated the amount but will still be withholding my retirement pay.

I do not understand...I thought only the VA would withheld for recoupment? I do know that due to the Veterans Benefit Act of 1998 (10 U.S.C. 1174a) that only the net (after taxes) can be recouped. Can anyone help me out here, obviously I rather have the VA recoup since they take a lessor amount.



PEB Forum Veteran
I think this applies to you. As I read it since you were prior service and received sep pay and later joined service and was injured they should not be recouping prior service severance pay. Anyone else read the same? Advise.

(h) Coordination With Retired or Retainer Pay and Disability Compensation.— (1) A member who has received separation pay under this section, or separation pay, severance pay, or readjustment pay under any other provision of law, based on service in the armed forces, and who later qualifies for retired or retainer pay under this title or title 14 shall have deducted from each payment of such retired or retainer pay so much of such pay as is based on the service for which he received separation pay under this section or separation pay, severance pay, or readjustment pay under any other provision of law until the total amount deducted is equal to the total amount of separation pay, severance pay, and readjustment pay received.
(2) 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.


PEB Forum Veteran
I received a voluntary separation incentive (VSI) in 1992. I'm supposed to receive payments annually until 2014. If I'm medically retired, does the preceding paragraph apply in that I won't have to pay back the VSI?


Registered Member
I keep getting mixed reviews about VA disability recoupment for someone who was Involuntarily separated due to HTY from the military and received Full ISP. I have found in the Milpersman 1160-120 about 3/4 of the way down it states how to avoid unwarranted recoupment. Does anyone know if this is true. If you notice in the instruction it states that the ISP is for members to help them adjust to reentry into civilian life and should have nothing to do with any illness or disablity that I may have incurred in the military and the two pays should be completely separate. The message that I am gonna copy below says it depends on what is on your DD 214 and I will be anxious to see if anyone has feed back on this. I believe that a lot of people are being done wrong and I want to know if anyone has the exact guidance and/or this has happened to. I am still waiting for my compensation percentage, but I would like to know if I am gonna be waiting even longer in case they want to take the money back from me. Any information would be great!



1. Purpose. The High Year Tenure (HYT) program is a vital and

effective force shaping tool to properly size and shape the Navy.

This policy establishes standardized length of service (LOS)

gates by paygrade balanced with a waiver process that allows the

Navy to retain the right Sailor. As one of the Navy's key

enlisted force shaping tools, the HYT program enables viable

career paths and advancement opportunity across all paygrades

and LOS spectrums. The standardized HYT gates are established

to allow the Sailor greatest flexibility to Stay Navy in a

stabilized Force. Through this process Navy enhances an Active

Component (AC) and Reserve Component (RC) continuum of service.

a. This article applies to members of the United States

Navy (USN), United States Navy Reserve (USNR) (Full Time Support)

(FTS), and USNR personnel serving on active duty for a minimum

of 2 consecutive years. HYT policy for personnel in the

Canvasser Recruiter (CANREC) program, Selected Reserve (SELRES),

or mobilized Reservists is contained in reference (a).

b. Unless HYT waiver approval is authorized by Navy

Personnel Command (NAVPERSCOM), personnel may only reenlist or

extend up to their HYT date for their current paygrade.

Personnel who have been selected for advancement to the next

higher paygrade may reenlist or extend up to the HYT date of

their prospective paygrade.

2. Definitions

a. Active Military Service: All active duty in the Army,

Navy, Air Force, Marine Corps, and Coast Guard.

b. Active Navy Service: All active duty in the Navy.

c. HYT Date: The date a Sailor will reach the LOS gate

contained in paragraph 3.

3. Maximum Years of Active Service. Current standardized HYT

gates by paygrade are outlined in the table below. Future

modifications to HYT gates may be announced via NAVADMIN prior

to revisions to this article. Professional growth criteria

outlined in MILPERSMAN 1160-030 must also be referred to in

order to determine reenlistment eligibility. Use the following

guidelines when computing active service:

a. HYT dates for active duty personnel are computed using

Active Duty Service Date (ADSD), not Pay Entry Base Date (PEBD).

b. Use only total active Navy service to compute HYT dates

for paygrades E-1 through E-4 Sailors. See paragraph 9d for

guidance on correcting the HYT dates for Other Service Veterans


c. All active military service is used to compute HYT dates

for E-5 through E-9 Sailors.

d. Active duty Sailors who have previous inactive duty

service must also calculate periods of Annual Training (AT),

Active Duty Training (ADT), Active Duty for Special Work (ADSW),

One Year Recall (OYR), Presidential Recall, and periods of

Mobilization into their active military service. Drill periods

are not considered active duty.

Grade Years Remarks
E1-E2 6 May not reenlist unless approval is granted via
Perform to serve (PTS) (if applicable) or
NAVPERSCOM, Career Progression Division
E-3 6 (8) Authorized to remain on active duty up to 8 years if
Sailor has Passed-Not Advanced (PNA) an E-4
exam and approval is granted via PTS (if applicable)
See paragraph 9d of this article for procedures to
request corrected HYT date.
E-4 8
E-5 14 (20) E-5 HYT date is modified to 14 years for Sailors with
less than 10 years of total active military service
as of 1 July 2005 (those Sailors whose ASDS is on
or after 1 July 1995). E-5 Sailors with 10 or more
years of total active duty service as of 1 July 2005
retain their HYT gate of 20 years (those Sailors
whose ASDS is on or before 30 June 1995).
E-6 20
E-7 24
E-8 26
E-9 30

4. HYT Waiver Eligibility. Requests to continue on active duty

beyond established HYT gates will be considered on a case-bycase
basis. Examples of requests which will be given favorable
a. In support of urgent, immediate operational requirements
in a deployed or soon-to-deploy unit.
b. Ratings which are identified as undermanned on the most
recent Career Reenlistment Objectives (CREO) message.
c. Waivers for Obligated Service (OBLISERV):

(1) Waivers for OBLISERV apply only to service
requirements incurred as a result of formal training. OBLISERV
for permanent change of station (PCS) orders, in general, does
not constitute a reason to exceed HYT dates. These waiver
requests will be considered on an individual basis via normal
waiver request procedures. OBLISERV stated on PCS orders does
not override HYT dates unless a HYT waiver request has been

approved prior to PCS execution.

(2) E-3 and E-4 personnel approved for rating conversion
(under PTS or the normal conversion process), via appropriate
Class "A" and/or "C" Schools, will be granted a HYT waiver to
coincide with expiration of the training OBLISERV requirement.
For example, an E-4 approaching his or her HYT date and
authorized conversion via an "A" School of 13–14 weeks in
duration must complete 24 months of OBLISERV (see MILPERSMAN
1306-604 for Service School obligation requirements); therefore,
the HYT date will be revised to reflect 24 months following
completion of formal training. Commands must liaison with
NAVPERSCOM, Enlisted Retirements Section (PERS-823) to ensure
the revised HYT date is accurately reflected in the Enlisted

Master File (EMF).

(3) E-3 and E-4 personnel approved for in-rate advanced
training ("C" School) will be granted a HYT waiver to coincide
with expiration of the training OBLISERV requirement as outlined

in paragraph 4c(2) above.

(4) E-4 personnel approved for the Selective Training
and Reenlistment (STAR) program are authorized to exceed
HYT dates as they will be advanced to E-5 and will incur a
4- to 6-year OBLISERV requirement upon successful completion of

required school.

NOTE: HYT waivers for the STAR program are for first-term
personnel only. HYT waivers will not be approved for any second

or subsequent reenlistments under this program.

d. Personnel who desire to maximize Selective Reenlistment
Bonus (SRB) Zones A, B, or C entitlement with a HYT waiver must
submit a HYT waiver request prior to submitting their SRB
precert request. These requests will be considered on an
individual basis.
e. All of the HYT waivers mentioned above must have prior
approval from NAVPERSCOM (PERS-823) prior to executing a


5. HYT Waiver Ineligibility. HYT waiver requests which are of
a strictly "personal convenience nature" will not be approved
and should not be submitted. Examples of such waiver requests
include (but are not limited to):

a. Commanding officers (COs) may not extend Sailors to
await examination results.
b. Personnel who desire to obtain the necessary service to
participate for advancement. In order to participate in an
advancement examination, a Sailor's HYT date must be after the
first day of the advancement cycle for which they are competing.
Specific dates for determining this advancement eligibility are

contained in paragraph 7.
c. To commence or continue medical treatment that is on an

outpatient basis (see paragraph 9b of this article for
authorized exceptions).
d. To allow a Sailor to continue or complete additional
off-duty education courses while still on active duty.
e. To permit a Sailor to have a more personally
advantageous date for retirement or separation (e.g., member
desires to retire in summer months).
f. To increase member's anticipated financial entitlements
(i.e., Involuntary Separation Pay or Fleet Reserve Retainer

check) based on length of military service.

g. To meet minimum eligibility requirements or to await

additional quotas for automatic advancement under any current or
future Navy automatic advancement program such as Command

Advancement Program (CAP).

6. Procedures for Requesting HYT Waivers

a. Requests for HYT waivers shall normally be submitted
using NAVPERS 1306/7 (Rev. 1-03), Enlisted Personnel Action
Request, and should arrive at NAVPERSCOM (PERS-823) 10 months
prior to established HYT date. In a time-critical situation,
commands may send a naval message. Submit HYT waiver requests
for FTS personnel to NAVPERSCOM, Reserve Enlisted Personnel
Section (PERS-913). Requests should include, at a minimum, the

following information:

(1) Member's rate, full name, and social security number
(2) Desired length of waiver in months.
(3) Reason for waiver with sufficient supporting
justification. Request is to indicate the specific operational
unit (if applicable) member is seeking assignment to.
(4) CO's endorsement and signature.

(5) Command point of contact (POC).

b. NAVPERSCOM (PERS-823) will staff HYT waiver requests
through the appropriate rating detailer and enlisted community
manager. Final approval or disapproval resides with Bureau of
Naval Personnel (BUPERS), Enlisted Community Management Branch
(BUPERS-32). Commands will be notified via naval message of

waiver disposition.

7. HYT and Advancement. Candidates for advancement who will be
over the established HYT date for their present paygrade on the
first day of the advancement cycle (see table below) are
ineligible for advancement consideration. These members are not
permitted to participate in an advancement examination and will

not be considered by a selection board unless they have already

received an approved HYT waiver from NAVPERSCOM (PERS-823) to

remain on active duty beyond that date.

If competing in below advancement cycle... Then must be on active duty
E-4/5/6 March exam 1 July same year
E-4/5/6 September exam 1 January following year
E-7 January exam 1 September same year
E-8/9 board 1 July same year

8. Involuntary Separation Pay (ISP). Personnel who are
separated due to HYT gates are normally entitled to full ISP.
MILPERSMAN 1920-030 through 1920-060 outline ISP definitions and
policy. In order to preclude unwarranted ISP recoupment action
by Defense Finance and Accounting Service (DFAS), commands
separating Sailors in paygrades E-5 and below for HYT (who are
otherwise fully retainable) shall complete Copy 4 of member's
DD-214, Certificate of Release or Discharge from Active Duty, as


a. Block 26 (Separation Program Designator (SPD) Code):
Use JBK if member is retention eligible except for HYT and
otherwise entitled to full ISP. Use JGH or LGH if member is not
retention eligible and only entitled to half ISP. Refer to
reference (a).

b. Block 27 (Reentry Code): RE-6.

9. Special Considerations

a. Twilight Tour Eligibility. E-9 personnel who receive a
HYT waiver forfeit their twilight tour eligibility.
b. Limited Duty (LIMDU) Status. Personnel in a LIMDU
status and approaching mandatory HYT retirement, mandatory HYT
transfer to the Fleet Reserve, or mandatory HYT separation will
only be retained on active duty if actually hospitalized as an
in-patient, or if their case has been accepted by the Physical
Evaluation Board (PEB) for disability determination. Being seen
as an outpatient or submitting a case to PEB (without it having
been accepted) is not sufficient justification to retain members

beyond their established HYT date.

c. Reduction in Rate (RIR)
(1) Personnel reduced in rate are authorized to complete
an enlistment properly entered into prior to reduction even if
the enlistment expires after HYT gates of the new paygrade.
Members in this category must separate at current expiration of
active obligated service (EAOS) if the new HYT gate is met or
exceeded unless they are granted a HYT waiver or are
subsequently advanced or reinstated. If the EAOS is prior to
the new HYT gate, they may continue on active duty until the HYT
gate of the new paygrade, if otherwise eligible. Personnel
reduced in rate to E-3 retain an 8-year HYT gate.
Commands must liaison with NAVPERSCOM (PERS-823) to ensure the

revised HYT date is accurately reflected in the EMF.
(2) Members who elect not to remain on active duty until

their normal EAOS may request early separation, if desired, from
NAVPERSCOM, Enlisted Performance and Separations Section

(PERS-832) via their CO.
d. Procedures to Correct HYT Dates

(1) E-3 Sailors who have Passed Not Advanced (PNA) a
Petty Officer Third Class (PO3) advancement examination are
authorized to remain on active duty for up to 8 years, if
otherwise eligible. In order to ensure the EMF reflects the
revised HYT date, commands must send a copy of the member's
advancement profile sheet to NAVPERSCOM (PERS-823) requesting
that the HYT date be changed from 6 to 8 years.
(2) HYT gates for Other Service Veterans (OSVETs) in
paygrades E-4 and below are computed based on total active Navy
service only. In order to correct the EMF to reflect the
correct HYT date, commands should send the following documents
(a) Copy of service member's initial enlistment
(b) Copy of each of service member's DD 214s, or
(c) Statement of service (SOS) reflecting all
periods of military service (in any branch)
(3) If it has been determined that a HYT date reflected
on a service member is incorrect, contact NAVPERSCOM (PERS-823)

for verification and subsequent correction to the EMF.


PEB Forum Veteran
VOLUNTARY SEPARATION INCENTIVE (VSI) info. I have continued receiving both military retirement pay and vsi until now. I received a 70% VA rating on 2 of 12 conditions--with the other conditions being deferred. Now I RECEIVED a letter from DFAS that I can't receive both VSI PAYMENT and VA Disability payment at the same time so while still entitled to VSI for several more years, as long as I'm receiving payment from the VA for equal or more than the amount of VSI, I will not receive FUTURE VSI payments. Had I not received the VA RATING, i would be making about $10,000 more per year. VSI payments are also being recouped @40% of base retirement pay. However, I would have preferred to receive the VSI and extended the payment period rather than having it cut off completely. How this all would PAN OUT was always confusing. Putting the information here in the event someone has a similar situation.