Severance Question

CryptoNerd

CryptoNerd

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Registered Member
Sorry to ask this question, but I haven't been able to find a straight answer. I just separated from the Navy and my EAOS was 29MAY21. I was rated at 10% by the DoD and am currently waiting on my severance pay. (Yes, I know that it will be taken out of my VA Disability) Just wondering how long it usually takes for that severance pay to actually come to me. Its a substantial amount and I would love to use that money to pay off all my debts and then some

Also, bonus question: Saw a bunch of stuff about tax refunds regarding severance, is it taxable? And if not, is that something I need to worry about, potentially getting wrongfully taxed?
 
Per 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: See DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 4, 4-8
040602. Recoupment of DSP

---
Ron
 
RonG said:
Per 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: See DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 4, 4-8
040602. Recoupment of DSP

---
Ron
Click to expand...
This has nothing to do with his question?!
 
Levine0808 said:
This has nothing to do with his question?!
Click to expand...
Perhaps you overlooked this part of his remarks: “Also, bonus question: Saw a bunch of stuff about tax refunds regarding severance, is it taxable? And if not, is that something I need to worry about, potentially getting wrongfully taxed?”

I included other material that was part of the DFAS page. He is going to experience a recoupment due to receipt of VA comp for the same disabilities. Please read his initial post again.

Ron
 
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