If you are medically discharged from the military, the benefits you receive depend on your disability rating and years of service: a rating under 30% with less than 20 years of service generally means a one-time severance payment, while a rating of 30% or higher — or 20 or more years of service — means lifetime monthly retirement pay. On top of that, you may qualify for tax-free VA disability compensation, VA health care, and transitional or continuing health coverage for you and your family.1Office of the Law Revision Counsel. 10 U.S.C. § 1201
What Your Disability Rating Decides
When the military finds you unfit for duty, it assigns a disability rating. That number, combined with your time in service and whether the condition is stable, sorts you into one of two tracks.
A rating under 30% with fewer than 20 years of service usually results in a medical separation with a lump-sum severance. A rating of 30% or more, or 20 years of service regardless of rating, generally results in medical retirement with monthly pay for life and continued access to TRICARE and base privileges for you and your eligible dependents.1Office of the Law Revision Counsel. 10 U.S.C. § 1201
DoD Severance Pay
Disability severance pay is a one-time lump sum. It equals two months of basic pay multiplied by your years of service, with a floor of three years (six years for combat-related cases) and a ceiling of 19 years.2DFAS. Disability Severance Pay
One catch matters here. The VA will generally withhold your monthly VA disability compensation until the severance amount has been recouped. That recoupment does not apply if the disability was incurred in a combat zone.3Office of the Law Revision Counsel. 10 U.S.C. § 1212
DoD Retirement Pay
If you are medically retired, you can generally choose between two formulas for your monthly payment: one based on your disability rating percentage, the other based on a multiplier applied to your years of service. The disability-percentage method is capped at 75% of your retired pay base. For most members who entered service after September 7, 1980, that base is the average of the highest 36 months of basic pay.4Office of the Law Revision Counsel. 10 U.S.C. § 14015Office of the Law Revision Counsel. 10 U.S.C. § 1407
Health Care After Discharge
Medically retired members and their eligible dependents keep TRICARE. If you are medically separated instead, you may qualify for 180 days of premium-free coverage through the Transitional Assistance Management Program (TAMP).6TRICARE. Transitional Assistance Management Program
Once TAMP runs out, or if you never qualified for it, the Continued Health Care Benefit Program (CHCBP) can bridge the gap to civilian coverage. It requires paid premiums and has strict enrollment deadlines, so it is worth lining up before your existing coverage ends.7TRICARE. Continued Health Care Benefit Program
Separately, if your discharge is under conditions other than dishonorable, you can apply for VA health care online at VA.gov, by phone, or in person at a VA medical center.8VA.gov. How to apply for VA health care
VA Disability Compensation
The VA runs its own rating system, and the monthly compensation it pays is exempt from federal income tax. To qualify, your discharge must be under conditions other than dishonorable.9Office of the Law Revision Counsel. 38 U.S.C. § 10110Office of the Law Revision Counsel. 38 U.S.C. § 5301
In most cases you cannot collect the full amount of both military retirement pay and VA disability compensation. Retirement pay is generally reduced dollar-for-dollar by the VA amount. The Concurrent Retirement and Disability Pay (CRDP) program is the main exception: retirees with 20 or more years of service and a VA rating of at least 50% can receive both without the offset.11Office of the Law Revision Counsel. 38 U.S.C. § 530512Office of the Law Revision Counsel. 10 U.S.C. § 1414
If Your Condition Is Not Yet Stable
Some conditions look like they will meet the retirement threshold but have not stabilized. In that case you can be placed on the Temporary Disability Retired List (TDRL). For members placed on the list on or after January 1, 2017, TDRL status can last up to three years. You draw retirement pay during that period and go through periodic exams to determine whether you move to permanent retirement or to separation.13DFAS. Temporary Disability Retired List
How the Ratings Get Set
The Integrated Disability Evaluation System (IDES) is the joint DoD-VA process that produces those ratings. A single set of medical exams is used to decide both fitness for duty and the disability ratings that each department will use. You see your proposed ratings before you leave active duty, which lets you see what your DoD and VA benefits will look like before the discharge is final.