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What is Separation Pay Recoupment and When Can VA Act?

by | May 22, 2024 | Veterans Disability Benefits |

Recoupment of Separation Pay by VA is conducted in certain situations with Veterans whose entitlement to disability compensation arose on or after September 15, 1981. Any Veterans whose service or entitlement to disability was established prior to September 15, 1981 are not subject to these provisions. Specifically, the VA in the Code of Federal Regulations Section 38 CFR 3.700(a)(3) provides:

Where the disability or disabilities found to be service-connected are the same as those upon which disability severance pay is granted, or where entitlement to disability compensation was established on or after September 15, 1981, an award of compensation will be made subject to recoupment of the disability severance pay. Prior to the initial determination of the degree of disability recoupment will be at the full monthly compensation rate payable for the disability or disabilities for which severance pay was granted. Following initial determination of the degree of disability recoupment shall not be at a monthly rate in excess of the monthly compensation payable for that degree of disability.

In simpler terms, any Veteran whose service occurred September 15, 1981 or later that has been separated from service due to a medical disability and received separation payment for their disability at the time of separation will have to pay that money back if the VA provides service connection for VA disability benefits for the same disability. It is also important to note that the VA states they will withhold the entire monthly rate related to the disability for which you were separated.

A bigger question Veterans may have is when will this recoupment of separation pay occur? Unfortunately, there is no set time for this type of action to occur. The VA and DFAS go through a certain number of cases each year to process for Separation Payment Recoupment so it is all dependent on when your file comes to the top, it could 3 years, 5 years, 15 years, there is no set time or time limit for such an action to be taken.

For Veterans who have received disability separation payments, this is important information to be mindful of when applying for disability benefits with VA and when they are ultimately received.

If you have any questions about VA benefits, the qualified Veterans’ Disability attorneys at Gardberg and Kemmerly want to help in any way possible. Gardberg and Kemmerly is committed to helping injured and disabled Veterans obtain the benefits they deserve.  If you need help with a disability claim, call our office at 251-343-1111 or 1-800-332-1529 for a free consultation. Gardberg and Kemmerly is proud to serve Veterans across the country from our home office in Mobile, Alabama. We would love an opportunity to discuss your claim.




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