DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 5-92
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	DONALD J. KULICK Administrator for Regional Management
SUBJECT	:	UCX - Separation Pay for Regular Enlisted Ex-Servicemembers

1. Purpose. To inform the SESAs that certain regular enlisted servicemembers are receiving separation pay, and to convey the procedures the SESAs should follow in regard to UCX claims filed by regular enlisted ex-servicemembers receiving separation pay.

2. References. Public Law (P.L.) 101-510; 5 U.S.C. 8502(b); 20 CFR Part 614; and ET Handbook No. 384.

3. Background. The Department of Defense (DOD) is planning to reduce the size of the armed forces by 25 percent-over the next five years. As a result of this reduction, certain military personnel will be discharged or released even though these personnel would prefer remain in the armed forces.

   Section 501 of P.L. 101-510, authorizes separation pay for certain regular enlisted members. A "regular enlisted member" is defined in Section 501(b) as a tr.-.r regular member of an armed force who is discharged involuntarily or as the result of the denial of the reenlistment of the member and who has completed six or more, but less than 20, years of active service immediately before that discharge. It is anticipated that less than 20 percent of all enlisted servicemembers will be receiving a separation payment. Since P.L. 101-510 was effective November 5, 1990, the DOD will be making retroactive separation payments to certain regular enlisted ex-servicemembers.

   For some time, certain officers have been receiving separation payments upon discharge or release from the armed forces, and the procedures for processing these former officers' UCX claims are not affected by this directive. In fact, the procedures described in Subsection 5.b. of this directive are the same as for these former officers' UCX claims.

4. Effect of Separation Payment on UCX Payments. Federal law at 5 U.S.C. 8502(b) provides that UCX shall be paid to an eligible ex-servicemember in the same amount, on the same terms and subject to the same conditions as the compensation would be payable to civilian employees under the unemployment compensation (UC) law of the applicable State. Therefore, military separation pay is subject to the same terms and conditions that apply to separation pay under provisions of the applicable State's UC law. This requirement is also contained in 20 CFR 614.4(a) and Chapter III of ET Handbook No. 384.

5. Procedures for Processing Separation Payments Made to Regular Enlisted Ex-servicemembers. 

   1. Retroactive payments. Retroactive separation payments to certain enlisted ex-servicemembers will be processed beginning in November 1991. Prior instructions concerning procedures for processing retroactive payments of separation pay to certain enlisted ex-servicemembers were in error. The Louisiana Claims Control Center (LCCC) will not receive a tape from the military which will identify all enlisted ex-servicemembers who have received retroactive separation payments and the amounts of such payments. The military is unable to provide this information on tape to the LCCC. An ex-servicemember's receipt of retroactive separation pay will be adjudicated according the provisions of applicable State UC law.

   2. Current Payments. The military began issuing separation pay to current eligible regular enlisted ex-servicemembers in November 1991. The "Remarks" section of the DD Form 214 (Item 18) for such current eligible ex-servicemembers contains the annotation of "separation pay" and the amount of the separation payment. This payment is received by the eligible regular enlisted ex-servicemember at discharge from the armed forces. The SESA claims personnel should examine all UCX claimants' DD Forms 214 to ascertain

   whether the servicemember has received separation pay. If a UCX claimant's DD Form 214 indicates receipt of separation pay, the SESA should take appropriate action on the UCX claim to apply the provisions of its State UC law with respect to a claimant's receipt of separation, pay.

6. Action Required. State Administrators should provide this information to appropriate staff and immediately implement procedures to apply State law provisions to UCX claims filed by "regular enlisted servicemembers" who have received separation pay.

7. Inquiries. Direct inquiries to the appropriate Regional office.