The Secretary of the Army may separate, versus retire, a soldier who is found physically unfit to perform their duties due to a disability. Separation may occur with entitlement to disability severance pay or without entitlement to disability benefits. Separation with disability severance pay occurs when the soldier's unfitting disabilities are determined by the Army to be service connected, the soldier has less than 20 years of service as computed under 10 USC 1208, and the soldier's combined disability rating assigned to the unfitting disabilities is less than 30%. Separation without entitlement to disability benefits occurs when the unfitting disabilities are determined to be non-service connected without permanent aggravation or incurred due to misconduct. Soldiers of the Ready Reserve with 20 qualifying years and soldiers of the Selected Reserve with 15 qualifying years with a disability disposition of separation with or without severance pay have an additional election in lieu of being separated. This additional election is discussed further in this paper.

Retired Soldiers are not eligible for Department of Defense (DoD) Disability Severance Pay but may be eligible for VA Disability Compensation.

For more information, please visit the following webpage maintained by the Department of Defense:
https://www.dfas.mil/retiredmilitary/plan/separation-payments/disability-severance-pay/

Volume 7B: “Military Pay Policy and Procedures – Retired Pay:
https://comptroller.defense.gov/Portals/45/documents/fmr/Volume_07b.pdf

Volume 7A: “Military Pay Policy and Procedures – Active Duty and Reserve Pay
https://comptroller.defense.gov/Portals/45/documents/fmr/Volume_07a.pdf

DoD Instruction 1332.18, “Disability Evaluation System (DES)”:
https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/133218e.PDF

Overview of the Army Physical Disability Evaluation System:
https://www.hrc.army.mil/content/Army%20Physical%20Disability%20Evaluation%20System

Online Resource for Americans with Disabilities:
https://www.dol.gov/general/topic/disability