Apr 24 2010
The Defense Finance and Accounting Service (DFAS) announced the recoupment of Voluntary Separation Incentive (VSI) and Special Separation Benefit (SSB) (including the other types of separation pays) will resume again starting in August 2010.
Recoupment of the separation pays stopped last June as DFAS reviewed the policies for repayment. The idea was to see if some flexible could be built into the repayment policy to provide a bit of relief for military families under financial strain. With the passage of some new laws, some flexibility can now be built into the repayment formula.
DFAS has reduced the maximum repayment rate from 90 to 40%. Those who can prove financial hardship may be eligible for even more lenient repayment schedules.
If this information applies to you, you will receive a letter from DFAS 90 days prior to recoupment beginning again. The letter will contain additional information for applying for hardship review. Former spouses who will be impacted by this program will also receive notification letters.
*** See my comments below on 20 May if you want to understand the gross-net tax issue better. ***
For more info, call DFAS at 800-321-1080 or go to www.dfas.mil/rapay.html.