I 

117TH CONGRESS 

2D SESSION H. R. 6543 

To amend title 10, United States Code, to eliminate the recoupment of 

separation pay, special separation benefits, and voluntary separation incentive payments from members of the Armed Forces who subsequently 

receive disability compensation under laws administered by the Department of Veterans Affairs and to impose limitations on the authority 

of the Secretary of Defense to recoup such pay from members who 

subsequently receive military retired or retainer pay. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 1, 2022 

Mr. GALLEGO (for himself, Mr. BILIRAKIS, and Mr. DESAULNIER) introduced 

the following bill; which was referred to the Committee on Armed Services, and in addition to the Committee on Veterans’ Affairs, for a period 

to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

To amend title 10, United States Code, to eliminate the 

recoupment of separation pay, special separation benefits, 

and voluntary separation incentive payments from members of the Armed Forces who subsequently receive disability compensation under laws administered by the Department of Veterans Affairs and to impose limitations 

on the authority of the Secretary of Defense to recoup 

such pay from members who subsequently receive military retired or retainer pay. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Restore Veterans’ 

5 Compensation Act of 2022’’. 

6 SEC. 2. RECOUPMENT OF SEPARATION PAY, SPECIAL SEPA7 RATION BENEFITS, VOLUNTARY SEPARATION 

8 INCENTIVE, AND VOLUNTARY SEPARATION 

9 PAY AND BENEFITS FROM MEMBERS OF THE 

10 ARMED FORCES. 

11 (a) SEPARATION PAY UPON INVOLUNTARY DIS12 CHARGE OR RELEASE FROM ACTIVE DUTY AND SPECIAL

13 SEPARATION BENEFITS.— 

14 (1) ELIMINATION OF RECOUPMENT FROM MEM15 BERS RECEIVING VETERANS DISABILITY COMPENSA16 TION.—Paragraph (2) of section 1174(h) of title 10, 

17 United States Code, is amended to read as follows: 

18 ‘‘(2)(A) A member who has received separation pay 

19 under this section, or severance pay or readjustment pay 

20 under any other provision of law, based on service in the 

21 armed forces shall not be deprived, by reason of the receipt 

22 of such separation pay, severance pay, or readjustment 

23 pay, of any disability compensation to which the member 

24 is entitled under the laws administered by the Department 

25 of Veterans Affairs. 


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1 ‘‘(B) The amount of disability compensation to which 

2 a member may be entitled under the laws administered 

3 by the Department of Veterans Affairs may not be re4 duced on account of the receipt of separation pay, sever5 ance pay, or readjustment pay.’’. 

6 (2) RECOUPMENT FROM MEMBERS RECEIVING

7 RETIRED OR RETAINER PAY LIMITED TO NET

8 AMOUNT OF SEPARATION PAY.—Section 1174(h)(1) 

9 of title 10, United States Code, is amended by in10 serting before the period at the end the following: ‘‘, 

11 less the amount of Federal income tax withheld from 

12 the separation pay, severance pay, or readjustment 

13 pay (such withholding being at the flat withholding 

14 rate for Federal income tax withholding, as in effect 

15 pursuant to regulations prescribed under chapter 24 

16 of the Internal Revenue Code of 1986)’’. 

17 (3) PERCENTAGE LIMITATIONS ON

18 RECOUPMENT FROM MEMBERS RECEIVING RETIRED

19 OR RETAINER PAY AND RECOUPMENT PROCESS.— 

20 Section 1174(h)(1) of title 10, United States Code, 

21 as amended by paragraph (2), is further amended— 

22 (A) by inserting ‘‘(A)’’ after ‘‘(1)’’; 

23 (B) by striking ‘‘shall specify, taking into 

24 account the financial ability of the member to 

25 pay and avoiding the imposition of undue finanVerDate Sep 11 2014 17:06 Feb 02, 2022 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6543.IH H6543

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1 cial hardship on the member and member’s de2 pendents,’’ and inserting ‘‘(subject to subpara3 graph (B)) shall specify’’; and 

4 (C) by adding at the end the following new 

5 subparagraphs: 

6 ‘‘(B) The amount deducted under subparagraph (A) 

7 from a payment of retired or retainer pay may not exceed 

8 25 percent of the amount of the member’s retired or re9 tainer pay for that month unless the member requests de10 ductions at an accelerated rate. The Secretary of Defense 

11 shall consult with the member regarding the repayment 

12 rate to be imposed, taking into account the financial abil13 ity of the member to pay and avoiding the imposition of 

14 an undue hardship on the member and the member’s de15 pendents. 

16 ‘‘(C) The deduction of amounts from the retired or 

17 retainer pay of a member under this paragraph may not 

18 commence until the date that is 90 days after the date 

19 on which the Secretary of Defense notifies the member 

20 of the deduction of such amounts under this paragraph. 

21 Any notice under this subparagraph shall be designed to 

22 provide clear and comprehensive information on the de23 duction of amounts under this paragraph, including infor24 mation on the determination of the amount and period of 

25 installments under this paragraph. 


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1 ‘‘(D) The Secretary of Defense may waive the deduc2 tion of amounts from the retired or retainer pay of a mem3 ber under this paragraph if the Secretary determines that 

4 deduction of such amounts would result in a financial 

5 hardship for the member.’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) VOLUNTARY SEPARATION INCENTIVE.—Sec8 tion 1175(e) of title 10, United States Code, is 

9 amended— 

10 (A) in paragraph (3)(A)— 

11 (i) by striking the first sentence and 

12 inserting the following new sentence: ‘‘Sub13 section (h) of section 1174 of this title 

14 shall apply to any member who has re15 ceived the voluntary separation incentive 

16 and who later qualifies for retired or re17 tainer pay under this title or for disability 

18 compensation under the laws administered 

19 by the Department of Veterans Affairs.’’; 

20 and 

21 (ii) in the second sentence, by striking 

22 ‘‘the deduction required under the pre23 ceding sentence’’ and inserting ‘‘the deduc24 tion from the member’s retired or retainer 

25 pay’’; and 


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1 (B) by striking paragraph (4) and redesig2 nating paragraph (5) as paragraph (4). 

3 (2) VOLUNTARY SEPARATION PAY AND BENE4 FITS.—Subsection (h) of section 1175a of title 10, 

5 United States Code, is amended to read as follows: 

6 ‘‘(h) COORDINATION WITH RETIRED OR RETAINER

7 PAY AND DISABILITY COMPENSATION.—(1) Subsection 

8 (h) of section 1174 of this title shall apply to any member 

9 who receives voluntary separation pay under this section 

10 and who later qualifies for retired or retainer pay under 

11 this title or title 14 or for disability compensation under 

12 the laws administered by the Department of Veterans Af13 fairs. 

14 ‘‘(2) No deduction shall be made from the disability 

15 compensation paid to an eligible disabled uniformed serv16 ices retiree under section 1413, or to an eligible combat17 related disabled uniformed services retiree under section 

18 1413a of this title, who is paid voluntary separation pay 

19 under this section. 

20 ‘‘(3) The requirement under this subsection to repay 

21 voluntary separation pay following retirement from the 

22 armed forces does not apply to a member who was eligible 

23 to retire at the time the member applied and was accepted 

24 for voluntary separation pay and benefits under this sec25 tion.’’. 


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1 (c) EFFECTIVE DATE AND APPLICATION OF AMEND2 MENTS.—The amendments made by this section shall take 

3 effect on the first day of the first month beginning on or 

4 after the date of the enactment of this Act. In the case 

5 of deductions to be made from the retired or retainer pay 

6 of members of the uniformed services, the amendments 

7 shall apply to that month and subsequent months. 

Æ 


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