Disability Separation vs Medical Retirement

The 30% threshold

The single number that determines your outcome under DoDI 1332.18: the percentage rating the military assigns to your unfitting condition(s). If that rating is 30% or higher → you are medically RETIRED (with pension, Tricare, exchange access, full benefits). If it is less than 30% → you are SEPARATED with severance pay (one-time lump sum, no pension, no Tricare beyond transition).

How the rating gets assigned (PEB)

After MEB (Medical Evaluation Board) finds you unable to perform your duties, your case goes to PEB (Physical Evaluation Board). The PEB assigns a percentage rating using the same 38 CFR Part 4 schedule the VA uses — BUT only for the SPECIFIC conditions deemed UNFITTING. This is different from the VA's rating, which covers ALL service-connected conditions, fit or not.

The 20-year alternative path

If you have 20+ years of active service when you separate via PEB, you are entitled to a regular length-of-service retirement regardless of disability rating. This matters because some service members with low disability ratings (under 30%) but high years of service get retirement anyway.

TDRL vs PDRL

If your condition might improve, PEB may place you on Temporary Disability Retired List (TDRL) for up to 3 years with periodic re-evaluations. If your condition is stable and chronic, you go to Permanent Disability Retired List (PDRL). Functionally similar benefits, different review cycles.

Dual-rating math (military + VA)

Your MILITARY disability rating may differ from your VA rating. The military rates only unfitting conditions; the VA rates all service-connected. A retiree might have a 30% military rating (one unfitting condition) and a 90% VA rating (combined service-connected). For most retirees: VA pay offsets military pay dollar-for-dollar UNLESS you qualify for CRDP (Concurrent Retirement and Disability Pay) or CRSC (Combat-Related Special Comp) — see crdp-crsc.

Why some service members PREFER separation

Severance pay is taxable up front but is paid as a lump sum. If you separate at 19 years 11 months with a 20% rating, you get severance + can immediately collect 100% of your VA rating + can take civilian employment without retired-pay offset rules applying. Some service members negotiate this trade-off deliberately.

Why most prefer retirement

Lifetime pension (high-3 or BRS formula × years of service × multiplier). Tricare for retirees (vs. 6-month transition Tricare for separation). Exchange/commissary access. Survivor Benefit Plan eligibility. The pension alone over a 30-year retirement period is typically $500K-$2M depending on rank. The Tricare value is another $50K-$200K depending on family.

The advocate question

You can hire a military disability attorney for the PEB process. Many are competent and worth it. Many are not. Free alternatives: PEBLO (PEB Liaison Officer) at your installation; a service-specific disability advocate (e.g., Army Office of Soldiers' Counsel); VSO-trained service officers familiar with MEB/PEB. Engage someone — going through PEB without representation typically results in worse outcomes.

• The 30% Cliff — the one-time reconsideration that can flip 20% to 30%
• MEB Navigator — the medical board process
• Chapter 61 — disability retirement detail
• CRDP/CRSC — concurrent receipt math
• VA Rating by Condition — for the dual-rating side