RAO Davao City

United States Military Retiree Activities Office Davao City, Philippines

Voluntary Separation Incentive

Posted by Service Officer on February 15th, 2008

There is a group of disabled veterans on the DOD payroll that are 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 includes 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. 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. Those interested in seeing legislation to correct this omission should contact their legislators and request his/her sponsorship of a bill. For sure, the 2009 NDAA should include VSI recipients in concurrent receipt. A suggested editable letter with automatic transmission means can be found at http://capwiz.com/usdr/issues/alert/?alertid=10921911&queueid=[capwiz:queue_id] to assist in this endeavor. [Source: USDR Action Alert 3 Feb 08 ++]

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