When Will I Get My Army Severance Pay?

Army severance pay provides financial assistance to service members transitioning from military to civilian life under specific circumstances. It aids individuals who separate from service due to involuntary actions or medical conditions, rather than completing a full career.

Understanding Your Severance Pay

Army severance pay falls into categories based on the reason for separation. Disability Severance Pay (DSP) is for service members found physically unfit for duty due to a service-connected disability, with less than 20 years of service and a disability rating under 30%. It is calculated as two months of basic pay for each year of service, with a minimum of three years credited, or six years if the disability was incurred in a combat zone.

Involuntary Separation Pay (ISP) is for service members involuntarily discharged or denied continued service before retirement eligibility, typically with six to less than 20 years of active duty. Reasons include force reductions, non-selection for promotion, or exceeding high year of tenure policies. ISP is calculated as 10% of the product of years of service, 12, and monthly basic pay, with a half-pay option under certain conditions. Recipients generally agree to serve a minimum of three years in the Ready Reserve.

The Payment Process and Timeline

The Defense Finance and Accounting Service (DFAS) manages and processes military pay, including severance payments. Once a service member’s separation is approved and documentation submitted, DFAS calculates and approves the severance amount.

For Disability Severance Pay, processing can take approximately 60 days from DFAS receiving all required documentation. General severance payments often take three to six months. Final pay, including basic pay and accrued leave, may be disbursed within five business days after separation. However, the larger severance payment follows a separate, longer schedule. Severance payments are disbursed via direct deposit.

Severance pay is considered taxable income, and federal taxes are withheld. An exception exists for Disability Severance Pay if the disability is combat-related or if the service member is later awarded Veterans Affairs (VA) disability compensation for the same condition. In such cases, a refund of previously withheld taxes may be requested from DFAS, requiring a DD Form 214, separation orders, and the VA award letter.

Recoupment occurs if a service member receives Disability Severance Pay and is later awarded VA disability compensation for the same condition. The VA recoups the severance pay amount from future disability compensation payments. This applies to the gross amount, with an exception for combat-related disabilities. Involuntary Separation Pay may also be recouped if the service member later becomes eligible for military retired pay or VA disability compensation.

Factors Influencing Payment Timing

Several variables affect how quickly Army severance pay is received. The completeness and accuracy of all required documentation is primary. Missing or incorrect paperwork, such as the DD Form 214 or medical board proceedings forms, can lead to substantial processing delays.

Administrative backlogs within DFAS or other processing entities also impact payment timelines. The volume of separations or complexity of calculations can extend processing times. Complex cases, like those involving detailed medical board proceedings for disability severance, require more time for review and approval.

The method of payment also plays a role. While direct deposit is the standard, issues with bank account information can cause delays. Mailed checks, if used, take longer to reach the recipient.

Outstanding debt is another factor that can hold up a payment. Even minor debts, such as tuition overpayments or property loss, can delay a final payment for 120 days or more while the finance office audits the account. Resolving any known debts with the Army prior to separation can prevent unexpected payment delays.

Monitoring Your Payment Status

After separating from the Army, recipients can track their severance pay status through several resources. The primary online tool for accessing pay information, including tax statements and leave and earnings statements, is myPay, managed by DFAS. Update your personal email address and establish a user ID and password for myPay before separation, as Common Access Card (CAC) access is lost. MyPay accounts remain accessible for approximately 13 months post-separation.

For specific inquiries about a severance payment exceeding typical processing times, the AskDFAS online inquiry system is available. When using AskDFAS or contacting any financial or personnel office, have personal identifying information ready, such as your Social Security Number and date of separation. DFAS can confirm receipt of claims and offer general updates after the initial processing period, often around 60 days.

For questions related to underlying separation orders or personnel actions that trigger severance pay, the Army Human Resources Command (HRC) or your former unit’s S-1/personnel office may offer guidance. These offices can verify necessary documents were submitted from their end, a prerequisite for DFAS processing. While they cannot directly provide payment status, they can help confirm administrative steps leading to DFAS involvement.