
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC1174]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle A--General Military Law
 
                           PART II--PERSONNEL
 
                         CHAPTER 59--SEPARATION
 
Sec. 1174. Separation pay upon involuntary discharge or release 
        from active duty
        
    (a) Regular Officers.--(1) A regular officer who is discharged under 
chapter 36 of this title (except under section 630(1)(A) or 643 of such 
chapter) or under section 580 or 6383 of this title and who has 
completed six or more, but less than twenty, years of active service 
immediately before that discharge is entitled to separation pay computed 
under subsection (d)(1).
    (2) A regular commissioned officer of the Army, Navy, Air Force, or 
Marine Corps who is discharged under section 630(1)(A), 643, or 1186 of 
this title, and a regular warrant officer of the Army, Navy, Air Force, 
or Marine Corps who is separated under section 1165 or 1166 of this 
title, who has completed six or more, but less than twenty, years of 
active service immediately before that discharge or separation is 
entitled to separation pay computed under subsection (d)(1) or (d)(2), 
as determined by the Secretary of the military department concerned, 
unless the Secretary concerned determines that the conditions under 
which the officer is discharged or separated do not warrant payment of 
such pay.
    (3) Notwithstanding paragraphs (1) and (2), an officer discharged 
under any provision of chapter 36 of this title for twice failing of 
selection for promotion to the next higher grade is not entitled to 
separation pay under this section if either (or both) of those failures 
of selection for promotion was by the action of a selection board to 
which the officer submitted a request in writing not to be selected for 
promotion or who otherwise directly caused his nonselection through 
written communication to the Board under section 614(b) of this title.
    (4) Notwithstanding paragraphs (1) and (2), an officer who is 
subject to discharge under any provision of chapter 36 of this title or 
under section 580 or 6383 of this title by reason of having twice failed 
of selection for promotion to the next higher grade is not entitled to 
separation pay under this section if that officer, after such second 
failure of selection for promotion, is selected for, and declines, 
continuation on active duty for a period that is equal to or more than 
the amount of service required to qualify the officer for retirement.
    (b) Regular Enlisted Members.--(1) A regular enlisted member of an 
armed force who is discharged involuntarily or as the result of the 
denial of the reenlistment of the member and who has completed six or 
more, but less than 20, years of active service immediately before that 
discharge is entitled to separation pay computed under subsection (d) 
unless the Secretary concerned determines that the conditions under 
which the member is discharged do not warrant payment of such pay.
    (2) Separation pay of an enlisted member shall be computed under 
paragraph (1) of subsection (d), except that such pay shall be computed 
under paragraph (2) of such subsection in the case of a member who is 
discharged under criteria prescribed by the Secretary of Defense.
    (c) Other Members.--(1) Except as provided in paragraphs (2) and 
(3), a member of an armed force other than a regular member who is 
discharged or released from active duty and who has completed six or 
more, but fewer than 20, years of active service immediately before that 
discharge or release is entitled to separation pay computed under 
subsection (d)(1) or (d)(2), as determined by the Secretary concerned, 
if--
        (A) the member's discharge or release from active duty is 
    involuntary; or
        (B) the member was not accepted for an additional tour of active 
    duty for which he volunteered.

    (2) If the Secretary concerned determines that the conditions under 
which a member described in paragraph (1) is discharged or separated do 
not warrant separation pay under this section, that member is not 
entitled to that pay.
    (3) A member described in paragraph (1) who was not on the active-
duty list when discharged or separated is not entitled to separation pay 
under this section unless such member had completed at least six years 
of continuous active duty immediately before such discharge or release. 
For purposes of this paragraph, a period of active duty is continuous if 
it is not interrupted by a break in service of more than 30 days.
    (4) In the case of an officer who is subject to discharge or release 
from active duty under a law or regulation requiring that an officer who 
has failed of selection for promotion to the next higher grade for the 
second time be discharged or released from active duty and who, after 
such second failure of selection for promotion, is selected for, and 
declines, continuation on active duty--
        (A) if the period of time for which the officer was selected for 
    continuation on active duty is less than the amount of service that 
    would be required to qualify the officer for retirement, the 
    officer's discharge or release from active duty shall be considered 
    to be involuntary for purposes of paragraph (1)(A); and
        (B) if the period of time for which the officer was selected for 
    continuation on active duty is equal to or more than the amount of 
    service that would be required to qualify the officer for 
    retirement, the officer's discharge or release from active duty 
    shall not be considered to be involuntary for the purposes of 
    paragraph (1)(A).

    (d) Amount of Separation Pay.--The amount of separation pay which 
may be paid to a member under this section is--
        (1) 10 percent of the product of (A) his years of active 
    service, and (B) 12 times the monthly basic pay to which he was 
    entitled at the time of his discharge or release from active duty; 
    or
        (2) one-half of the amount computed under clause (1).

    (e) Requirement for Service in Ready Reserve; Exceptions To 
Eligibility.--(1)(A) As a condition of receiving separation pay under 
this section, a person otherwise eligible for that pay shall be required 
to enter into a written agreement with the Secretary concerned to serve 
in the Ready Reserve of a reserve component for a period of not less 
than three years following the person's discharge or release from active 
duty. If the person has a service obligation under section 651 of this 
title or under any other provision of law that is not completed at the 
time the person is discharged or released from active duty, the three-
year obligation under this subsection shall begin on the day after the 
date on which the person completes the person's obligation under such 
section or other provision of law.
    (B) Each person who enters into an agreement referred to in 
subparagraph (A) who is not already a Reserve of an armed force and who 
is qualified shall, upon such person's discharge or release from active 
duty, be enlisted or appointed, as appropriate, as a Reserve and be 
transferred to a reserve component.
    (2) A member who is discharged or released from active duty is not 
eligible for separation pay under this section if the member--
        (A) is discharged or released from active duty at his request;
        (B) is discharged or released from active duty during an initial 
    term of enlistment or an initial period of obligated service;
        (C) is released from active duty for training; or
        (D) upon discharge or release from active duty, is immediately 
    eligible for retired or retainer pay based on his military service.

    (f) Counting Fractional Years of Service.--In determining a member's 
years of active service for the purpose of computing separation pay 
under this section, each full month of service that is in addition to 
the number of full years of service creditable to the member is counted 
as one-twelfth of a year and any remaining fractional part of a month is 
disregarded.
    (g) Coordination With Other Separation or Severance Pay Benefits.--A 
period for which a member has previously received separation pay under 
this section or severance pay or readjustment pay under any other 
provision of law based on service in the armed forces may not be 
included in determining the years of service that may be counted in 
computing the separation pay of the member under this section.
    (h) Coordination With Retired or Retainer Pay and Disability 
Compensation.--(1) A member who has received separation pay under this 
section, or separation pay, severance pay, or readjustment pay under any 
other provision of law, based on service in the armed forces, and who 
later qualifies for retired or retainer pay under this title or title 14 
shall have deducted from each payment of such retired or retainer pay so 
much of such pay as is based on the service for which he received 
separation pay under this section or separation pay, severance pay, or 
readjustment pay under any other provision of law until the total amount 
deducted is equal to the total amount of separation pay, severance pay, 
and readjustment pay received.
    (2) A member who has received separation pay under this section, or 
severance pay or readjustment pay under any other provision of law, 
based on service in the armed forces shall not be deprived, by reason of 
his receipt of such separation pay, severance pay, or readjustment pay, 
of any disability compensation to which he is entitled under the laws 
administered by the Department of Veterans Affairs, but there shall be 
deducted from that disability compensation an amount equal to the total 
amount of separation pay, severance pay, and readjustment pay received, 
less the amount of Federal income tax withheld from such pay (such 
withholding being at the flat withholding rate for Federal income tax 
withholding, as in effect pursuant to regulations prescribed under 
chapter 24 of the Internal Revenue Code of 1986). Notwithstanding the 
preceding sentence, no deduction may be made from disability 
compensation for the amount of any separation pay, severance pay, or 
readjustment pay received because of an earlier discharge or release 
from a period of active duty if the disability which is the basis for 
that disability compensation was incurred or aggravated during a later 
period of active duty.
    (i) Regulations; Crediting of Other Commissioned Service.--(1) The 
Secretary of Defense shall prescribe regulations, which shall be uniform 
for the Army, Navy, Air Force, and Marine Corps, for the administration 
of this section.
    (2) Active commissioned service in the National Oceanic and 
Atmospheric Administration or the Public Health Service shall be 
credited as active service in the armed forces for the purposes of this 
section.

(Added Pub. L. 96-513, title I, Sec. 109(c), Dec. 12, 1980, 94 Stat. 
2870; amended Pub. L. 97-22, Sec. 10(b)(10)(A), July 10, 1981, 95 Stat. 
137; Pub. L. 98-94, title IX, Secs. 911(a), (b), 923(b), title X, 
Sec. 1007(c)(2), Sept. 24, 1983, 97 Stat. 639, 640, 643, 662; Pub. L. 
98-498, title III, Sec. 320(a)(2), Oct. 19, 1984, 98 Stat. 2308; Pub. L. 
101-189, div. A, title XVI, Sec. 1621(a)(1), Nov. 29, 1989, 103 Stat. 
1602; Pub. L. 101-510, div. A, title V, Sec. 501(a)-(d), (g), (h), Nov. 
5, 1990, 104 Stat. 1549-1551; Pub. L. 102-190, div. A, title XI, 
Sec. 1131(6), Dec. 5, 1991, 105 Stat. 1506; Pub. L. 103-160, div. A, 
title V, Sec. 501(a), Nov. 30, 1993, 107 Stat. 1644; Pub. L. 103-337, 
div. A, title V, Sec. 560(c), Oct. 5, 1994, 108 Stat. 2778; Pub. L. 104-
201, div. A, title VI, Sec. 653(a), Sept. 23, 1996, 110 Stat. 2583; Pub. 
L. 105-85, div. A, title X, Sec. 1073(a)(22), Nov. 18, 1997, 111 Stat. 
1901; Pub. L. 105-261, div. A, title V, Sec. 502(a), Oct. 17, 1998, 112 
Stat. 2003; Pub. L. 106-398, Sec. 1 [[div. A], title V, Sec. 508(a), 
(b)], Oct. 30, 2000, 114 Stat. 1654, 1654A-107.)

                       References in Text

    Chapter 24 of the Internal Revenue Code of 1986, referred to in 
subsec. (h)(2), is classified generally to chapter 24 (Sec. 3401 et 
seq.) of Title 26, Internal Revenue Code.


                               Amendments

    2000--Subsec. (a)(4). Pub. L. 106-398, Sec. 1 [[div. A], title V, 
Sec. 508(a)], added par. (4).
    Subsec. (c)(4). Pub. L. 106-398, Sec. 1 [[div. A], title V, 
Sec. 508(b)], added par. (4).
    1998--Subsec. (a)(3). Pub. L. 105-261 added par. (3).
    1997--Subsec. (a)(1). Pub. L. 105-85 struck out ``, 1177,'' before 
``or 6383 of this title''.
    1996--Subsec. (h)(2). Pub. L. 104-201 inserted ``, less the amount 
of Federal income tax withheld from such pay (such withholding being at 
the flat withholding rate for Federal income tax withholding, as in 
effect pursuant to regulations prescribed under chapter 24 of the 
Internal Revenue Code of 1986)'' before period at end of first sentence.
    1994--Subsec. (a)(1). Pub. L. 103-337 inserted ``, 1177,'' after 
``section 580''.
    1993--Subsec. (a)(1). Pub. L. 103-160 substituted ``six'' for 
``five''.
    1991--Subsec. (a)(1). Pub. L. 102-190 substituted ``section 580'' 
for ``section 564''.
    1990--Subsec. (a). Pub. L. 101-510, Sec. 501(a)(1), inserted 
heading.
    Subsec. (a)(1). Pub. L. 101-510, Sec. 501(g)(1), substituted ``or 
under section 564 or 6383 of this title'' for ``, under section 564 or 
6383 of this title, or under section 603 or 604 of the Defense Officer 
Personnel Management Act'' and struck out ``or release'' after ``that 
discharge''.
    Subsec. (a)(2). Pub. L. 101-510, Sec. 501(b)(1), substituted ``six 
or more'' for ``five or more''.
    Pub. L. 101-510, Sec. 501(a)(2), redesignated subsec. (b) as subsec. 
(a)(2).
    Subsec. (b). Pub. L. 101-510, Sec. 501(a)(3), added subsec. (b). 
Former subsec. (b) redesignated (a)(2).
    Subsec. (c). Pub. L. 101-510, Sec. 501(h)(1), inserted heading.
    Subsec. (c)(1). Pub. L. 101-510, Sec. 501(g)(2), struck out ``after 
September 14, 1981,'' after ``member who'' in introductory provisions.
    Pub. L. 101-510, Sec. 501(b)(1), substituted ``six or more'' for 
``five or more'' in introductory provisions.
    Subsec. (c)(3). Pub. L. 101-510, Sec. 501(b)(2), substituted ``at 
least six years'' for ``at least five years''.
    Subsec. (d). Pub. L. 101-510, Sec. 501(h)(2), inserted heading.
    Subsec. (d)(1). Pub. L. 101-510, Sec. 501(c)(1)(A), struck out ``or 
$30,000, whichever is less'' after ``active duty''.
    Subsec. (d)(2). Pub. L. 101-510, Sec. 501(c)(1)(B), struck out ``, 
but in no event more than $15,000'' after ``under clause (1)''.
    Subsec. (e). Pub. L. 101-510, Sec. 501(d), amended subsec. (e) 
generally. Prior to amendment, subsec. (e) read as follows: ``A member 
who--
        ``(1) is discharged or released from active duty at his request;
        ``(2) is released from active duty for training; or
        ``(3) upon discharge or release from active duty, is immediately 
    eligible for retired or retainer pay based on his military service;
is not eligible for separation pay under this section.''
    Subsec. (f). Pub. L. 101-510, Sec. 501(h)(3), inserted heading.
    Subsec. (g). Pub. L. 101-510, Sec. 501(h)(4), inserted heading.
    Pub. L. 101-510, Sec. 501(c)(2), struck out ``(1)'' after ``(g)'' 
and struck out par. (2) which read as follows: ``The total amount that a 
member may receive in separation pay under this section and severance 
pay and readjustment pay under any other provision of law, other than 
section 1212 of this title, based on service in the armed forces may not 
exceed $30,000.''
    Subsec. (h). Pub. L. 101-510, Sec. 501(h)(5), inserted heading.
    Subsec. (i). Pub. L. 101-510, Sec. 501(h)(6), inserted heading.
    1989--Subsec. (h)(2). Pub. L. 101-189 substituted ``Department of 
Veterans Affairs'' for ``Veterans' Administration''.
    1984--Subsec. (h)(1). Pub. L. 98-498 substituted ``separation pay, 
severance pay,'' for ``severance pay'' before ``or readjustment pay'' in 
two places.
    1983--Subsec. (c). Pub. L. 98-94, Sec. 911(a), amended subsec. (c) 
generally, designating existing provisions as par. (1) and existing 
pars. (1) and (2) as subpars. (A) and (B), respectively, and in 
provisions preceding subpar. (A) substituted ``Except as provided in 
paragraphs (2) and (3), a member'' for ``A member'' and ``fewer than 20, 
years of active service immediately before that discharge or release is 
entitled to separation pay'' for ``less than twenty, years of active 
service immediately before that discharge or release is entitled, unless 
the Secretary concerned determines that the conditions under which the 
member is discharged or separated do not warrant such pay, to separation 
pay'', and added pars. (2) and (3).
    Subsec. (f). Pub. L. 98-94, Sec. 923(b), amended subsec. (f) 
generally, substituting ``each full month of service that is in addition 
to the number of full years of service creditable to the member is 
counted as one-twelfth of a year and any remaining fractional part of a 
month is disregarded'' for ``a part of a year that is six months or more 
is counted as a whole year and a part of a year that is less than six 
months is disregarded''.
    Subsec. (g)(2). Pub. L. 98-94, Sec. 911(b), inserted ``, other than 
section 1212 of this title,'' after ``any other provision of law''.
    Subsec. (i). Pub. L. 98-94, Sec. 1007(c)(2), designated existing 
provisions as par. (1) and added par. (2).
    1981--Subsec. (c). Pub. L. 97-22 substituted ``after September 14, 
1981,'' for ``on or after the effective date of the Defense Officer 
Personnel Management Act''.


                    Effective Date of 2000 Amendment

    Pub. L. 106-398, Sec. 1 [[div. A], title V, Sec. 508(c)], Oct. 30, 
2000, 114 Stat. 1654, 1654A-107, provided that: ``Paragraph (4) of 
section 1174(a) of title 10, United States Code, as added by subsection 
(a), and paragraph (4) of section 1174(c) of such title, as added by 
subsection (b), shall apply with respect to any offer of selective 
continuation on active duty that is declined on or after the date of the 
enactment of this Act [Oct. 30, 2000].''


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-261 applicable with respect to selection 
boards convened under section 611(a) of this title on or after Oct. 17, 
1998, see section 502(c) of Pub. L. 105-261, set out as a note under 
section 617 of this title.


                    Effective Date of 1996 Amendment

    Pub. L. 105-178, title VIII, Sec. 8208, June 9, 1998, 112 Stat. 495, 
provided that: ``The amendment made by section 653 of the National 
Defense Authorization Act for Fiscal Year 1997 (Public Law 104-201; 110 
Stat. 2583) to subsection (h)(2) of section 1174 of title 10, United 
States Code, shall apply to any payment of separation pay under the 
special separation benefits program under section 1174a of that title 
that was made during the period beginning on December 5, 1991, and 
ending on September 30, 1996.''
    Section 653(b) of Pub. L. 104-201 provided that: ``The amendments 
made by this section [amending this section] shall take effect on 
October 1, 1996, and shall apply to payments of separation pay, 
severance pay, or readjustment pay that are made after September 30, 
1996.''


                    Effective Date of 1993 Amendment

    Section 501(b) of Pub. L. 103-160 provided that:
    ``(1) Except as provided in paragraph (2), the amendment made by 
subsection (a) [amending this section] shall apply with respect to any 
regular officer who is discharged after the date of the enactment of 
this Act [Nov. 30, 1993].
    ``(2) The amendment made by subsection (a) shall not apply with 
respect to an officer who on the date of the enactment of this Act has 
five or more, but less than six, years of active service in the Armed 
Forces.''


                    Effective Date of 1991 Amendment

    Amendment by Pub. L. 102-190 effective Feb. 1, 1992, see section 
1132 of Pub. L. 102-190, set out as a note under section 521 of this 
title.


                    Effective Date of 1990 Amendment

    Section 501(e) of Pub. L. 101-510 provided that:
    ``(1) Except as provided in paragraph (2), subsection (b) of section 
1174 of title 10, United States Code, as added by subsection (a), and 
the amendments made by subsections (b), (c), and (d) [amending this 
section] shall apply with respect to a member of the Armed Forces who is 
discharged, or released from active duty, after the date of the 
enactment of this Act [Nov. 5, 1990].
    ``(2) The amendments made by subsection (b) [amending this section] 
shall not apply in the case of a member (other than a regular enlisted 
member) of the Armed Forces who (A) is serving on active duty on the 
date of the enactment of this Act, (B) is discharged, or released from 
active duty, after that date; and (C) on that date has five or more, but 
less than six, years of active service in the Armed Forces.''


                    Effective Date of 1983 Amendment

    Section 911(c) of Pub. L. 98-94 provided that: ``The amendments made 
by this section [amending this section] shall take effect on October 1, 
1983.''
    Section 923(g) of Pub. L. 98-94 provided that: ``The amendments made 
by this section [amending this section and sections 1401, 1402, 1402a, 
3991, 3992, 6151, 6328, 6330, 6404, 8991, and 8992 of this title, 
section 423 of Title 14, Coast Guard, section 853o of Title 33, 
Navigation and Navigable Waters, and section 212 of Title 42, The Public 
Health and Welfare] shall apply with respect to (1) the computation of 
retired or retainer pay of any individual who becomes entitled to that 
pay after September 30, 1983, and (2) the recomputation of retired pay 
under section 1402, 1402a, 3992, or 8992 of title 10, United States 
Code, of any individual who after September 30, 1983, becomes entitled 
to recompute retired pay under any such section.''


                    Effective Date of 1981 Amendment

    Section 10(b) of Pub. L. 97-22 provided that the amendment made by 
that section is effective Sept. 15, 1981.


                             Effective Date

    Section effective Sept. 15, 1981, but the authority to prescribe 
regulations under this section effective on Dec. 12, 1980, see section 
701 of Pub. L. 96-513, set out as an Effective Date of 1980 Amendment 
note under section 101 of this title.


  Transition Provisions Under Defense Officer Personnel Management Act

    For provisions to prevent extinction or premature termination of 
rights, duties, penalties, or proceedings that existed or were begun 
prior to the effective date of Pub. L. 96-513 and otherwise to allow for 
an orderly transition to the system of officer personnel management put 
in place under Pub. L. 96-513, see section 601 et seq. of Pub. L. 96-
513, set out as a note under section 611 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 580, 642, 1165, 1166, 1174a, 
1186, 6383, 14517, 14905 of this title.
