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Representatives DeSaulnier and Gallego Introduce Bill to Protect Veterans Unfairly Forced to Return Separation Pay

WASHINGTON, DC – Today, Congressman Mark DeSaulnier (CA-11) and Congressman Ruben Gallego (AZ-7) introduced the Restore Veterans’ Compensation Act, legislation that would prevent the federal government from forcing veterans to return separation pay if they later qualify for VA disability benefits. The bill also makes other changes to the Department of Defense’s recoupment policies to make them fairer to veterans.

Many service members qualify for separation pay when they depart the military—it’s a form of compensation for those with more than six years of service who meet reenlistment requirements but are not allowed to reenlist. It’s also used to incentivize service members to depart the military when the Pentagon is working to downsize the force. Unfortunately, under current law, veterans are required to pay back separation pay if they later become eligible for VA disability benefits or DOD retirement pay.

“Our nation’s servicemembers sign up to protect our country, yet despite their sacrifices we have not lived up to our promises to them. Instead of recognizing their service and giving them the financial support they need to enter the civilian world, tens of thousands of servicemembers who have been injured in the line of duty have their disability payments taken away. It is time for this predatory and unfair practice to end. I am proud to lead this effort with Representative Gallego to ensure that we leave none of our veterans behind,” said Congressman DeSaulnier.

The Restore Veterans’ Compensation Act bill would:

  • Prohibit the recoupment of separation pay from veterans who later become eligible for VA disability benefits because the two compensate for different things—workplace injuries (disability benefits) versus time served (separation pay);
  • Ensure retirees repay the net amount of separation pay instead of the gross amount to prevent the federal government from recouping more than the veteran received; and,
  • Change the recoupment rate to 25 percent of a veterans’ paycheck instead of the current 40 percent.

“As a Marine Corps combat veteran, I believe it is remarkably unfair that veterans who receive disability benefits are forced to return their separation pay,” said Congressman Gallego. “The two are completely unrelated – VA disability benefits compensate for injuries incurred during service, while separation pay compensates for time served. This policy simply makes no sense and Congress has a responsibility to our brave veterans to fix it.”

The Restore Veterans’ Compensation Act is the latest in a series of measures introduced by Congressman DeSaulnier to help veterans receive compensation they have earned. He has also introduced a bipartisan amendment to provide financial transparency that would inform servicemembers separating from the Armed Services of the possibility of the conflict between separation and disability pay. Congressman DeSaulnier has also introduced an amendment that would require a study of the number of veterans who are impacted by this discrepancy and how much money has been withheld from servicemembers.

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