On Friday I received a VA letter stating that I was rated with 30% service-connected disability with a payment of around $450. The letter also stated that my payments would start in April 2016. My rating was approved on 3 March.

I spoke with the VA (TERRIBLE CUSTOMER SERVICE BTW) and they said that the law states that any severence pay (Separation pay) from the military for separating early is to be repaid to the Treasury Dept upon the approval of any disability.

I separated last June and received $19,000 in separation pay. Before I got my VA letter, I received a letter from the DAV that said what my rating was, so I was expecting to receive that payment, plus 9 months of backpay, on 1 April. The e-benefits website also had all my documentation about how much my payment would be, but no mention of having to repay my separation pay.

I spoke with a veteran's benefits attorney who told me that this is a closely guarded secret. She said that separation pay is a "loan" until the disability is approved, then the separation pay is taken out of the disability until it is paid back. When I attended the TAPS briefing at my base, the DAV representative that briefed us was extremely honest and up front about everything that can happen with the VA (the time spent waiting for medical evaluations, time spent waiting for rating approval, how to appeal the rating...). Not one person in that briefing mentioned this to us.

I just wanted to share my experience. I will be calling my DAV representative tomorrow to ask why this is not part of the briefing about SCD. Basically, if you get separation pay and don't file for any SCD, you're fine. If you get separation pay and you DO file for SCD, you will be repaying that separation pay through the VA. All of my disability packpay and my monthly payment will go to the Treasury Dept for the next two years.