Veterans who received separation pay when leaving the military could be allowed to keep more—or potentially all—of their later disability benefits under two new bills introduced in the Senate.

The measures take different approaches to a long-standing requirement that can leave some veterans without their monthly Department of Veterans Affairs (VA) disability payments while the government recovers separation money they received when leaving military service.

One proposal would largely end that recoupment from disability benefits, while another would limit how much the VA could withhold each month.

The bills, which come from Democratic Senator Ruben Gallego of Arizona and Republican Senator Jim Risch of Idaho, were introduced to Congress on August 6 and August 5, respectively. Newsweek has contacted representatives for both senators for comment via email outside regular working hours.

Disability payments from the VA provide financial support for veterans living with a broad range of physical and mental health conditions, such as chronic illnesses, mobility impairments, post-traumatic stress disorder and traumatic brain injuries.

Why Veterans Can Lose Disability Payments

Separation pay is a lump-sum payment available to some service members who leave the military involuntarily. Department of Defense guidance says full involuntary separation pay can generally be available to eligible service members who have completed at least six but fewer than 20 years of active service and are involuntarily separated under qualifying circumstances.

That can include service members who are denied reenlistment or continuation on active duty. Separation payments have also been used as a tool when the military reduces the size of its force.

VA disability compensation serves a different purpose. It is a tax-free monthly payment for veterans with illnesses or injuries caused or worsened by military service. Veterans can qualify for compensation for both physical and mental health conditions, with payment amounts generally determined by their disability rating and, at higher ratings, whether they have any dependents.

The problem arises when a veteran has received both types of payment. Defense Department guidance says a service member who receives involuntary separation pay and later qualifies for VA disability compensation will have those later payments reduced until the separation pay has been recovered.

Two Proposals To Change Benefits Rules

Gallego's Restore Veterans' Compensation Act would stop separation pay from being recouped from veterans who later become eligible for VA disability benefits, arguing that the two payments compensate veterans for different things.

"Separation pay and disability compensation serve two entirely different purposes—one honors time served, while the other addresses workplace injuries sustained," Gallego said in a news release.

His bipartisan legislation would also change rules affecting veterans who later qualify for military retirement pay. Those veterans would repay the net amount of separation pay they received rather than the gross amount, while the recoupment rate from retired veterans' paychecks would be reduced from 40 percent to 25 percent.

Risch's Veterans' Earned Benefits Access Act would retain the requirement for veterans to repay separation pay, but change the speed at which the money can be collected.

Risch's office said that under current law the VA can withhold a veteran's entire monthly disability payment while recovering the separation pay. His bill would instead cap monthly repayment at 25 percent of the veteran's disability compensation, allowing them to continue receiving the remaining portion of their benefit.

"Idaho veterans who answered the call to serve our country should not face delays in accessing their earned benefits," Risch said.

His legislation applies to veterans who were involuntarily separated from service, including through military downsizing, but would not apply to those who received a dishonorable discharge.

How Much Are VA Disability Benefits?

VA disability compensation is based on a veteran's disability rating, which runs from 0 to 100 percent in 10-point increments. Generally, the higher the rating, the larger the monthly payment.

Each rating carries a set compensation amount. A veteran with a 10 percent disability rating, for example, receives $180.42 per month, while someone rated 100 percent disabled receives a base monthly payment of $4,085.43.

Veterans with ratings of 30 percent or higher may qualify for additional payments if they have eligible dependents, such as a spouse, children or parents. A veteran rated 100 percent disabled with a spouse and one child, for instance, would receive $4,318.99 per month.

Contact Newsweek editors on this story: Ben Kelly and Shakeema Edwards.