DOD Disability: Overview of Compensation Program for Service Members Unfit for Duty

This report provides information on the Department of Defense's (DOD) disability severance program, which provides a lump-sum payment for service members with a disability. GAO found that the administration of disability severance, like medical retirement pay, follows service-specific procedures using DOD guidance. The services assess members' fitness for duty along a scale ranging from 0 to 100 percent in gradations of 10. Members unfit for duty who have 20 or more years of military service with any disability rating or who are assigned a disability rating of 30 percent or higher receive medical retirement payment. In contrast, the lump-sum disability severance payment is made to members unfit for duty who have less than 20 years of military service and who are assigned a disability rating less than 30 percent. In fiscal year 2000, the number of assessments resulting in disability severance payment was more than double the number of assessments resulting in medical retirement. The services and DOD could not provide GAO with data on how much it costs to make disability decisions or issue payments or how long it takes. DOD does not provide special financial counseling on the use of lump-sum payments for members leaving with a disability severance payment. Rather, as part of transition assistance to civilian life, financial counseling is available to all members at family service centers or within members' military units.