Someone else will probably provide a more complete set of answers.
1. Disability severance pay is a one-time lump sum payment. The amount equals 2 months of basic pay for each year of service which includes active service and inactive duty points, but the total service years cannot exceed 19 years. Additionally, the minimum number of years required for computation purposes is six years for a disability incurred in the line of duty in a combat zone, or 3 years in the case of any other member. Prior to January 28, 2008, a maximum of 12 years and minimum of three years creditable service was used.
2.
Disability Separation Pay: The VA is required by law to withhold disability compensation payments for service members who received a disability severance payment when they separated from the military (Chapter 61), if the VA disability compensation is for the same disability. This is to prevent a veteran from receiving duplicate benefits.
Exception: The VA will not deduct compensation pay if the military disability severance pay was received for disabilities incurred in line of duty in a combat zone or incurred during performance of duty in combat-related operations as designated by the Department of Defense (DoD). (Note: this must be a Line of Duty designation by the DoD to be waiverable – this is related to the CRSC rating mentioned above). This exception applies to members who were separated from the Armed Forces under Chapter 61 of title 10, United States Code, on or after January 28, 2008.
3. Opinion: The Tricare benefit associated with retirement is valuable. Recommend you give your options careful consideration when viewing retirement vs. separation.
Ron
