Disability Severance Pay

When a servicemember is removed from the Temporary Disability Retired List (TDRL), but not not fit for duty, pursuant to 10 U.S. Code § 1203 he/she will be separated from the service, and generally will be entitled to disability severance pay..

 

Eligibility

A servicemember who meets the following criteria set out in section 1203 is eligible for the pay:

  1. Under 20 years of service,
  2. The disability was not caused by intentional misconduct or willful neglect, nor while the servicemember was AWOL,
  3. The disability may be permanent, and
  4. The disability is under 30% and incurred in the line of duty or as a result of service.

What does this mean? If a servicemember is unfit for duty, but not otherwise eligible for a normal 20-year retirement or placement on the Permanent Disability Retired List (PDRL), then he/she may receive disability severance pay.

 

Amount of Severance Pay

The formula for calculating the pay is set out in 10 U.S. Code § 1212. It is: years of active service (up to a maximum of 12) x 2 x highest base pay rate earned by the servicemember. Partial years under 6 months are rounded down, and those over six months are rounded up.

As an example, in 2010 an E-6 with 10 years of service has a base pay of $3148.20. So that servicemember's disability severance pay would be: 10 x 2 x $3148.20, or a total of $62,964.

 

Treatment of Disability Severance Pay in a Divorce

There is no clear-cut case law concerning whether disability severance pay is divisible.  There is a 1997 Colorado Court of Appeals decision, In re: Marriage of Heupel, 936 P.2d 561 (Colo. App. 1997) holding that a a lump-sum payment to a servicemember who opted for a voluntary separation incentive (i.e. an "early out") is divisible marital property.  However, that decision is distinguishable for at least two reasons:

  1. The lump sum was paid in lieu of retirement, not as compensation for a disability, and
  2. The servicemember voluntarily opted to leave early and take the money, unlike a member who is unfit for duty and has no choice.

More recently, the holding of In re: Marriage of Williamson (see discussion) suggests that disability severance pay will likely not be treated as marital property subject to division.

 

More Information

 Army Physical Disability Evaluation System, a detailed explanation of the process from the U.S. Army Human Resources Command.