Most Soldiers involuntarily separated from active duty are eligible for separation pay. The figures shown below are the payments to people who have exactly the number of years of service listed
Actual payments are based on both full and partial years of service.
Official DoD Separation Pay site —> Separation Pay
Military members who are involuntarily separated from the military may be entitled to involuntary separation pay (severance pay).
To be eligible, a military member must have six or more years of active duty, and less than 20 years.
There are two types of pay: (1) Full Pay and (2) Half Pay.
FULL SEPARATION PAY
To qualify for full pay, the member must be involuntarily separated, be fully qualified for retention and the service must be characterized as “Honorable.” Examples would be separation due to reduction in force, or separation due to exceeding the high year of tenure (e.g., RCP).
Note: To qualify for full-separation pay, the member must have entered into a written agreement with the Military Service concerned to serve in the Ready Reserve of a Reserve Component of the Armed Forces for a minimum period of 3 years following the separation from active duty and meet other condition for performance of that service.
HALF SEPARATION PAY
To qualify for half pay, the member must be involuntarily separated, with service characterized as Honorable or General (under honorable conditions), and the reason for discharge must be under certain categories. Examples would be discharge due to failing fitness/weight standards or involuntary discharge due to parenthood.
Current separation pay guidance:
DoDFMR 7000.14R, Chapter 35, Section 3502, Separation Pay (Nondisability)
**IMPORTANT NOTE** Recoupment of Separation Pay
IAW DoD 7000.14-R, Financial Management Regulation, Volume 7B, Chapter 4, Section 040502:
http://comptroller.defense.gov/Portals/45/documents/fmr/Volume_07b.pdf
a. A member who received separation pay and who later qualifies for retired or retainer pay under Titles 10 or 14 of the U.S.C.,shall have deducted from payment of such retired or retainer pay a monthly installment as specified in section 0410.
b. A member who receives separation pay, and who also is eligible for disability compensation from Department of Veteran Affairs (VA), will repay an amount equal to the total amount of separation pay received from the disability compensation awarded. The DFAS shall make no deduction for separation pay from disability compensation based on service performed after receiving separation pay.