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When service members separate from the military, they may receive one of many types of separation benefits. Some of these service members later become eligible for other types of compensation, such as U.S. Department of Veterans Affairs (VA) Disability Compensation (VADC). To avoid paying more than one award of compensation to any person based on that individual's service-what is sometimes called double-dipping-VA is prohibited from paying compensation to a veteran who also received certain separation benefits from the U.S. Department of Defense until the full separation amount has been withheld, or recouped. Recoupment of separation pay is complicated and can cause confusion and frustration among veterans. On the one hand, from a legal standpoint, veterans are not losing money, because they were paid previously in the form of separation pay, and a deduction is being made to avoid duplication of benefits. But on the other hand, veterans might not know that their VA benefits will be reduced if they received separation pay in the past, and recoupment can come as a surprise. Because of concern about how recoupment affects veterans, Congress required that a study be conducted to determine (1) how many members and veterans who received separation pay, special separation benefits, and voluntary separation incentive payments are affected by recoupment and (2) the aggregated amount of additional money members and veterans would receive in the absence of recoupment. RAND researchers conducted analyses to respond to these questions, and this report summarizes the findings.
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