Military buyback and severance pay

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Q. I am a new civil employee. I received an early-out due to force reduction. I am a 50 percent disability veteran I paid the severance pay to the Veterans Affairs Department before I could receive compensation. Now I want buy back my military time toward federal retirement. Is the severance pay included in my total earnings during my active duty? If so, is severance pay deducted from the amount to buy back time, since it was paid to the VA?

A. While I don’t know anything about the interaction of your severance pay and VA compensation, if you want to make a deposit for your active-duty service, the amount you need to pay is a small percentage of your basic military pay, not including allowances or differentials.

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About Author

Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

3 Comments

  1. This issue is common to many of us service connected disabled veterans that were separated from our military and awarded either a full or partial severance award, then later on received a compensable disability rating from the VA, to which the VA deducted EVERY PENNY OF OUR SEVERANCE PAYMENT from the disability payments we were to receive (in my case over $16K). When we joined the Federal Civilian Workforce as Federal Government Employees, we are allowed to buy back our service time based on the amount of money we received during our military service (which includes that severance pay that the VA took away from us).
    I consider it shameful that Congress pass legislation and regulations were enacted to legally steal through
    double dipping. Why would they punish someone that they broke their contract by taking away their severance settlement in exchange for disability compensation, then make them pay to buy back their military service based on compensation (including that severance settlement that was taken away by the VA)?
    Why would anyone screw over us like that?

    So your response that, “the amount you need to pay is a small percentage of your basic military pay, not including allowances or differentials.” is like pouring salt into a deep wound inflicted by Congress and implemented by DoD, VA, and Federal agencies because of Congress. This problem must be fixed, as it leaves a bitter taste in our mouths and hearts.

  2. Hello,
    I need a straight forward answer as to my military buy back amount and If I have to pay it back again. I was discharged in Nov of 1997 due to a spinal injury. I paid back the severance pay of $8368.20 to the Army so I could receive my disability pay. Now I am a federal employee and I am being told that I need to buy back my military time to get the full benefit of my retirement and such.

    • To get credit for your active duty time in your civilian annuity computation, you’ll need to make a deposit to the Civil Service Retirement and Disability Fund. That deposit will equal 3 percent of the basic military pay (not allowances and differentials) you received while on active duty. To find out what you owe, complete Form RI-20-97, Estimated Earnings During Military Service, and mail it to your military finance center, along with a copy of your DD Form 214, Report of Transfer or Discharge. When your finance center sends that information to you, take it and a copy of your DD 214 and a Standard Form 3108 to your local payroll office and request a estimate of the deposit required. If you decide to buy back that time, you can do so in a lump sum or on a schedule of regular payments. Note: You can download the RI and Standard Form by going to http://www.opm.gov and clicking on Forms.

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