To amend title 10, United States Code, to eliminate the recoupment of separation pay, special separation benefits, and voluntary separation incentive payments from members of the Armed Forces who subsequently receive disability compensation under laws administered by the Department of Veterans Affairs and to impose limitations on the authority of the Secretary of Defense to recoup such pay from members who subsequently receive military retired or retainer pay.

Sponsor: Gus M. Bilirakis (Republican-FL)January 13, 2026

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Introduced

In Committee

Passed One Chamber

Passed Both Chambers

Signed into Law

Referred to the Committee on Armed Services, and in addition to the Committee on Veterans' Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Ends government clawbacks of disability pay for veterans who received separation benefits.

This bill would stop the government from taking back separation pay from veterans who later receive disability benefits from the Department of Veterans Affairs. It would also set new limits and procedures for recouping separation pay from military retirement checks.

What Would Change

Today, the government can take back separation pay, severance pay, or voluntary separation incentives from service members who later receive Department of Veterans Affairs disability compensation or military retired pay, sometimes without specific limits on monthly deductions or considering taxes. This bill would stop taking back separation pay from VA disability compensation entirely. For military retired or retainer pay, it would limit monthly deductions to 25% of the pay and ensure only the after-tax amount of separation pay is recouped, with a 90-day notice and hardship waivers.

Key Provisions

Ends the practice of taking back separation pay from veterans who receive Department of Veterans Affairs disability compensation.
Caps monthly deductions from military retirement or retainer pay at 25% of the payment, unless a service member asks for faster repayment.
Requires the government to only take back the net amount of separation pay (after federal income taxes) from military retirement or retainer pay.
Requires the Secretary of Defense to consult with service members about repayment rates, considering their financial ability.
Lets the Secretary of Defense waive repayment if it would cause a financial hardship for a service member.
Requires a 90-day notice period before any deductions from military retirement or retainer pay begin, with clear information.

View on Congress.gov

HR 7027 · 119th Congress · January 13, 2026 · AI Summary by gemini-2.5-flash · 8/10

Lobbying Activity

6 filings mentioned this bill

Top Lobbying Clients

PROTECT THE 1ST, INC.

$390K

12 filings

AMERICAN SPEECH-LANGUAGE-HEARING ASSOCIATION

1 filing

PHILANTHROPY ROUNDTABLE

10 filings

Top Lobbying Firms

1.PHILANTHROPY ROUNDTABLE10 filings

2.GOODLATTE GROUP, LLC F.K.A. ROBERT GOODLATTE6 filings

3.SCHAERR JAFFE LLP6 filings

4.AMERICAN SPEECH-LANGUAGE-HEARING ASSOCIATION1 filing

Amounts reflect total quarterly lobbying spend reported to the Senate, not bill-specific spending. Source: Senate LDA filings.