Veterans of the US Army who had received bonuses to leave the Army early in their career would have to refund the money they received as part of their compensation benefits. This action will see over 100,000 people affected, and a total of $2.5 billion added back to the treasury of the US Army.
Why is a refund happening?
The refund of the sum of $2.5 billion, which is expected to rise even higher, is a necessary step that has been taken after it was discovered that these veterans were still receiving disability benefits from Veterans Affairs, which they had become unable to receive upon their choice to leave the service early on.
This is due to the federal law passed in 2022, which has stopped the payment of veterans benefits to former members of the Army who voluntarily left the Army. These people are not allowed to receive the compensation that other veterans who served the full length of their service enjoy.
What is a voluntary separation incentive payment in the US Army?
The Voluntary Separation Incentive Payment (VSIP) in the US Army is a lump sum given to veterans who voluntarily resign from the Army before the scheduled time of service completion. This payment is made only when you are eligible to receive it and must have indicated an interest in leaving the Army through a resignation, an optional retirement, or an early retirement.
What are the implications of a VSIP?
First, you are not entitled to severance pay when you leave the Army via VSIP. This is because severance pay is exclusively reserved for those who have not left the Army voluntarily. More than this, individuals who leave the service voluntarily are paid an amount not more than $25,000 in service pay, which will be received by those who saw out their time in the service of the Army.
Veterans who receive severance pay cannot work for the government for the next five years, starting when they receive their VSIP. However, if you choose to return to service before the five-year mark, you will pay a gross fee before the first day of your redeployment to the government agency.
The VSIP represents a way through which the US government can adequately reward members of government agencies who have served for a while before deciding to stop. While they might not get the same reward as those who have been able to serve even longer and retire at the right time, the payment does ensure that service to the US government does not go unrewarded at any level.
