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Employment – Veterans – Service Credit for Federal Government Veterans’ Benefits

Among the benefits veterans receive while working for the federal government are leave and retirement benefits. Veterans also receive certain preferences as a result of their status during reductions in force, and they may receive severance pay when separated from service. The rate at which veterans accrue service credit for these governmental benefits depends upon the type of benefit in consideration.


The threshold issue for leave accrual is whether or not the employee is retired from the military. If the employee is not retired, he or she receives full credit for honorable active duty and active duty for training. However, if the employee is retired, credit is only received in two circumstances: service in a war or a campaign or expedition for which campaign badges were authorized, and, if retirement from the military was based on a disability, all active duty, but only if the disability was incurred during a period of war as a result of armed conflict or an instrumentality of war. For leave accrual purposes, a period of war includes the Korean conflict, World War II, the Vietnam era, the Gulf War, or any congressionally declared war.

Retirement Benefits

Service credit for retirement benefits parallels, in large part, service credit for leave accrual. Again, the defining characteristic is whether the employee has already retired from the military. If the employee is not retired, full credit is again given for honorable uniformed service, but the employee must make regular deposits to the retirement fund to receive this credit. The amount of the deposit depends upon the date the employee was first employed in a civil service position. Those employed before October 1, 1982 can choose whether to make a deposit or whether to have their annuities recalculated. Those first employed between October 1, 1982 and December 31, 1983 must deposit seven percent, and those first employed on or after January 1, 1984 must deposit three percent.

Veterans retired from military service only receive credit for their military service if they waive their entitlement to military retired pay. An exception to this rule exists for retired pay made to those who retired due to service-connected disabilities incurred in the line of active duty during a period of war.

Reductions in Force

Unretired veterans are given full credit for both active duty and active duty in training when service credit is calculated for reductions in force. However, retired veterans only receive credit for active duty if they qualify as preference eligibles for the purpose of reductions in force. If not qualified for reduction in force preferences, retirees receive service credit only for active service during either a war or a campaign or expedition for which campaign badges were authorized.

Severance Pay

Military veterans are limited in the credit they receive for their military service when severance pay is calculated. Specifically, if retirees return to civilian service, they do not receive credit for their military service unless their return to civilian service was pursuant to an official restoration right.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.