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Guard and Reserve separation benefits

Drilling members of the Guard and Reserve who are not on extended active duty are eligible for separation benefits only if they are involuntarily forced out of the service due to the deactivation of a unit or changes in force structure, and the Defense Department has approved those benefits. In some circumstances, a determination of permanent medical disability can qualify a reservist for benefits.

Separation pay is offered rarely. The Defense Department currently is not offering it.

The programs are not as robust as those offered to active-duty members and are not voluntary. Reservists must be selected for retention or separation by their commanders. If reservists are separated due to unsatisfactory service, they are not eligible for severance pay.

Reservists and Guard members on full-time active duty are covered by the same separation programs as career active-duty troops. Eligibility for a specific program or benefit depends on individual qualifications such as rank, career specialty and years of service.

Separation Pay

When it is authorized and given, separation pay is offered to those who decline voluntary separation programs and still are forced out of the service.

Benefit formula. Basic separation pay is 12 times monthly basic pay at the time of separation from active duty, times 0.10 (10 percent), times the active service time as computed in the Department of Defense Financial Management Regulation, Vol. 7A.

Eligibility. An active-duty reservist must have at least six years on active duty, five of which must be continuous at the time of discharge. The member must have an honorable discharge and meet one of the following criteria:

• Formally discharged under reduction-in-force provisions.

• Fully qualified but denied re-enlistment.

• As an enlisted member, rated “failed to promote.”

• As an officer, fully qualified but not selected for, or denied, promotion.

The following categories of personnel are ineligible for separation pay:

• Dishonorable, bad conduct or other-than-honorable discharge recipients.

• Anyone eligible for retirement pay.

• Those on initial active-duty obligations.

• Anyone on active duty for training.

• Members discharged as a result of court-martial sentences or in lieu of a court-martial.

• Members discharged for unsatisfactory or substandard performance.

Taxes. Separation pay benefits are fully taxable. For more information, see your unit career counselor or administrative officer.

Involuntarily separated Selected Reserve members with six to 15 years of service who meet the criteria listed above may be eligible for separation pay. This is a lump-sum payment given at the time of discharge.

Each year of active service is worth 365 retirement points, and each year of reserve service is worth 75 points. Reserve time must be translated into active-duty time. Under the separation pay formula, 360 reserve points equal one year of active-duty service. Multiply the number of years of qualifying service by 75.

If a reservist who takes this bonus rejoins the reserves and drills for pay, pay will be reduced by 75 percent until the total separation pay is repaid.