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.
H.R. 7027, the Restore Veterans’ Compensation Act of 2026, would change how the Department of Defense offsets certain separation-related payments when a service member later receives Veterans Affairs disability compensation or military retirement pay. Under current law, separation pay, special separation benefits, and some voluntary separation incentives can be “recouped” by reducing later disability benefits; the bill would eliminate that recoupment so disability compensation is not reduced because of those payments. For people who later receive retired or retainer pay, the bill limits recoupment deductions and sets rules such as capping deductions at 25 percent per month unless the member agrees to a faster repayment, requiring 90 days’ notice before deductions begin, and allowing hardship waivers in hardship cases. The changes would take effect at the start of the first month after enactment, and retirement-related deductions would be governed by the new limits in that month and future months.
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