Restore Veterans’ Compensation Act of 2026

This bill would change federal law so that service members who received separation pay, severance pay, or readjustment pay when leaving the military would no longer have that pay taken back out of their Veterans Affairs disability compensation. For members who later receive military retired or retainer pay, the amount to be repaid would be reduced by the federal income tax withheld from the separation pay. Monthly deductions from retired or retainer pay could not exceed 25 percent unless the member asks for a faster rate. Deductions could not begin until 90 days after the Secretary of Defense notifies the member, and the Secretary could waive deductions for financial hardship. The same rules would apply to voluntary separation incentive and voluntary separation pay programs.

Full text and official record on Congress.gov

Sponsors

• Ruben Gallego Democrat sponsor
• 0 cosponsors