Question about 1. severance and 2. last steps of PEB timeline

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btr30

Well-Known Member
Registered Member
Hello,

I found out I was rated 0% DOD and 100% VA.

Question 1 - can anyone confirm if I'm thinking about severance correctly?
2 * base pay * years of service = severance
Severance taxed at 25% (non-combat related injury) = taxed severance
When I file my taxes, I will not get any refund from the severance that was taxed
Therefore, I won't be getting anything extra from the DOD
Therefore, the VA won't recoup anything from their monthly check to me

Question 2 - can anyone confirm these next steps?
The VA sends their findings to the PEB (I got my ratings unofficially from my MSC)
The PEB medical officer needs to finalize my results - how long does this take?
I need to sign off on the PEB findings - how long would I have?
I receive separation orders and separate - any idea on a timeline?

Thanks so much. This forum has been incredibly helpful.
 
Hello @btr30

Disability Severance Pay, Calculation and Payment​


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.

If your disability was incurred in a combat zone, your DSP will be computed using 6 years if it is more than the actual years served.
If your disability was incurred outside a combat zone, your DSP will be computed using 3 years if it is more than the actual years served.

Disability severance pay is taxable income unless the pay results from a combat-related injury or the service member receives official notification from the Department of Veterans Affairs (VA) approving entitlement to disability compensation.

From DFAS:
Disability Severance Pay is not taxable or subject to federal income tax withholding for members meeting 1 or 2 below:


1. You have a combat related injury or illness as determined by your military service at separation that:


  • Resulted directly from armed conflict; or
  • Took place while you’re engaged in extra-hazardous service; or
  • Took place under conditions simulating war, including training exercises such as maneuvers; or
  • Was caused by an instrumentality of war.

2. You are receiving VA disability compensation or you have received notification from the VA approving such compensation.


------------------

RECOUPMENT OF DISABILITY SEVERANCE PAY

Recoupment of Disability Severance Pay:
Here is some information from the VA regarding recoupment.
M21-1, Part III, Subpart v, Chapter 4, Section B - Recoupment of Separation Benefits
III.v.4.B.3.b. General Policies Regarding Withholdings to Recoup Disability Severance PayGenerally, if a Veteran received disability severance pay, VA must withhold from his/her monthly compensation an amount equal to the monthly compensation payable for the disability(ies) for which the Veteran received disability severance pay. VA continues to withhold this amount until it has recouped the amount specified in M21-1, Part III, Subpart v, 4.B.2.d.

Important:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).
  • If a Veteran has multiple, severance-pay disabilities, each rated 0-percent disabling, and VA assigns a 10-percent disability rating to them under 38 CFR 3.324, no withholding is necessary for these disabilities until VA assigns a compensable rating to one or more of them, individually.
  • Withhold the additional benefits payable because of application of the bilateral factor if
    • the initial, compensable rating included application of the bilateral factor, and
    • entitlement to the bilateral factor was based exclusively on severance-pay disabilities.
 
Last edited:
My case was sent to the PEB on December 27. January 17 I was told my case was with the VA. How long did it take for them to tell you the VA findings?
 
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