Voluntary separation incentive

[TinCanMan]

There is yet another group of disabled veterans on the DOD payroll that is totally excluded from the benefits of the restoration of concurrent receipt: those separated under provision of title 10 US Code Sec 1175 - Voluntary Separation Incentive (VSI) that was used in conjunction with Temporary Early Retirement Authority (TERA, PL 102-484 Sec 4403(f)) to reduce the size of the military establishment during 1992 through 2001. Beginning 31 DEC 92, VSI was offered to service members having at least 6 but less than 20 years of service. They receive an annual amount funded by the Department of defense that equals the multiplication product of four factors: (1) their base pay at separation, (2) number of years of service, (3) 12 and (4) 2.5%. Note that while the annual amount is identical to the 12 times the monthly amount they would have received if retired for the same length of service, the VSI amount is not considered retirement pay. If the VSI recipient later qualifies for VA compensation for service connected disability, the same title 38 US Code sections that require a $1 for $1 offset of military retired pay also require the same offset of the VSI amount. While the 2003 NDAA included TERA retirees under Concurrent Retirement Disability Pay (CRDP, 10 USC 1414) it excludes VSI recipients because they are not "retired."

The 2008 NDAA included Chapter 61 medical disability retirees under the Combat Related Special Compensation (CRSC, 10 USC 1413a) but not CRDP. Regardless, one can be retired under Chapter 61 with a minimum of 30 days active service. Extending CRSC to Chapter 61 restores their retirement pay (based on 2.5% x length of service x base pay) that is offset by VA disability compensation. The President's Budget Request for 2010 includes restoration of CRDP for Chapter 61 over 5 years, but includes nothing for VSI recipients. Thus there is some form of relief of the VA disability compensation offset extended to TERA and Chapter 61 retirees, but absolutely no relief for VSI recipients. For sure, the 2010 NDAA should include VSI recipients in concurrent receipt. Veterans can urge the President and their Senators to propose legislation that would enfranchise VSI recipients under the restoration of concurrent receipt that is provided by CRDP and CRSC at Welcome to USDR*-*USDR - Uniformed Services Disabled Retirees[capwiz:queue_id] . Here they will find a preformatted message which can be forwarded via email once they have entered their contact data

Pentagon pay officials have suspended the recoupment of several bonuses paid out during the post-Cold War effort to trim the ranks, pending a formal policy and legal review, the Defense Finance and Accounting Service said 21 MAY. The bonuses, including Variable Separation Incentive (VSI), Special Separation Benefit (SSB), severance pay and other payments, were offered to active-duty service members in certain career fields, primarily during the 1990s. Those receiving the payments were required to maintain an affiliation with a unit of the Ready Reserve. But the payments came with the stipulation that those who eventually earned status as a military retiree would have to pay them back. The repayments, however, apparently have caused financial difficulties for at least some of the affected veterans, and more than a few contacted their congressional representatives. “Over the past few months, the department has received numerous congressional inquiries concerning the recoupment,” Pentagon Comptroller Robert Hale wrote in a 18 MAY memo sent to DFAS Director Teresa McKay ordering the recoupment suspension. “The inquiries raise concerns about financial hardship resulting from these reductions in retired pay, particularly during the current economic situation.”

According to DFAS, the federal statutes governing the bonus programs do not allow the Pentagon or DFAS to alter repayment ratios or provide alternative repayment plans, regardless of a retiree’s finances. Still, several members of Congress, Hale wrote in the memo, released by DFAS, asked the Pentagon to identify “any available options to alleviate the financial difficulties that these members are encountering.” The suspension of recoupment efforts affects military retirees in an active pay status effective for May 2009 retired pay entitlements. As such, military retired pay for those members received on 1 JUN 09, will not be reduced by any recoupment amounts, DFAS says. About 1,100 former service members are affected by the suspension, according to DFAS spokesman Tom LaRock — nearly 600 of whom were already seeing reductions in their retired pay, and another 600 or so whose cases were under consideration for reductions. DFAS says letters to military retirees in the affected recoupment statuses will soon be mailed advising them of the suspension of recoupment payments. Those same retirees will be sent a follow-up letter after the review is completed advising them of the review’s conclusions. Retirees with questions can call DFAS’s Retired and Annuity Pay Contact Center at 1-800-321-1080 between 0700 and 1930 M-F according to DFAS. Select options 5, 1, 5, and 0 to speak to a live customer representative.