Federal severance pay after a RIF
For involuntary separations — unless you can retire instead.
Not if you’re eligible for an immediate annuity — including discontinued service retirement. Eligibility disqualifies you, even if you don’t take the annuity.
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1. Who qualifies
You're eligible for severance pay if all of these are true:
- You're a full-time or part-time employee on a qualifying appointment.
- You have at least 12 months of continuous service.
- You're involuntarily separated — a reduction in force, an abolished position — and not for misconduct, delinquency, or inefficiency.
- You're not eligible for an immediate annuity, including discontinued service retirement.
- You didn't turn down a reasonable offer of another position.
A removal for cause doesn't qualify for severance, just as it doesn't qualify for discontinued service retirement. That situation is covered in facing removal.
2. How it’s calculated
Severance has two parts. The basic allowance, based on your weekly rate of basic pay including locality, but not overtime or bonuses:
| Service | Credit |
|---|---|
| Each full year, up to 10 | 1 week of basic pay |
| Each full year beyond 10 | 2 weeks of basic pay |
| Each full 3 months beyond the last full year | 25% of the applicable week(s) |
Then the age adjustment: 2.5% of the basic allowance for each full three months of age over 40. That's 10% per year over 40, so at 50 the allowance doubles.
The total is capped at 52 weeks of basic pay over your lifetime.
3. A worked example
A GS-12 earning $95,000 in basic pay, with 15 years and 6 months of service, separated at 45:
| Step | Weeks |
|---|---|
| First 10 years × 1 week | 10 |
| Next 5 years × 2 weeks | 10 |
| 6 months = 2 quarters × 25% × 2 weeks | 1 |
| Basic allowance | 21 |
| Age 45: 20 quarters over 40 × 2.5% = 50% | +10.5 |
| Total | 31.5 weeks |
| At $1,827 a week ($95,000 ÷ 52) | ~$57,500 |
That's under the 52-week cap. An older employee with more service can hit the cap, at which point additional years or age add nothing.
4. Severance or retirement?
This is the decision point, and the rule is strict: if you're eligible for an immediate annuity when you separate, you can't get severance — even if you'd rather not take the annuity.
| At separation, you are… | What you get |
|---|---|
| 50 with 20 years, or any age with 25 (involuntary) | Discontinued service retirement, not severance |
| Eligible for an immediate retirement otherwise | The annuity, not severance |
| Not eligible for any immediate annuity | Severance pay |
So severance mostly reaches younger employees and those with shorter careers. If you're close to a retirement threshold, the difference matters enormously: an immediate annuity pays for life and carries FEHB, while severance is capped at a year. See discontinued service retirement and the 2026 RIF rules.
With five or more years of service you still have a deferred annuity waiting at 60 or 62. Don't take a refund of your contributions — it wipes that out.
5. How it’s paid, and when it stops
- Installments, not a lump sum. Severance is generally paid each pay period at your regular rate until the allowance runs out.
- It stops if you take a federal job — federal or District of Columbia — unless it's a qualifying short-term appointment.
- It's recomputed if you're separated again, on all your service and your current age, minus the weeks already paid, still under the 52-week lifetime cap.
- It's taxable as ordinary income.
Separation also ends FEHB after 31 days unless you retire, with temporary continuation available at full cost. See bridging healthcare before 65.
6. Frequently asked questions
Who gets federal severance pay?
A full-time or part-time employee on a qualifying appointment with at least 12 months of continuous service who is involuntarily separated for reasons other than misconduct, delinquency, or inefficiency, such as a reduction in force. You are not eligible if you are eligible for an immediate annuity, including discontinued service retirement, or if you decline a reasonable offer of another position.
How is federal severance pay calculated?
The basic allowance is one week of basic pay for each full year of creditable service through 10 years, plus two weeks for each full year beyond 10, plus 25 percent of the applicable amount for each full three months beyond the last full year. That is then increased by an age adjustment of 2.5 percent for each full three months of age over 40. The total is capped at 52 weeks of pay over your lifetime.
Can I get severance pay and a retirement annuity?
No. You are not eligible for severance pay if you are eligible for an immediate annuity when you separate, including a discontinued service retirement. It is eligibility that matters, not whether you actually take the annuity. An employee who qualifies for discontinued service retirement gets that instead.
Is severance paid as a lump sum?
Generally no. Federal severance pay is paid in installments each pay period at your regular rate, until the allowance is used up or you are reemployed by the federal government.
What happens if I take another federal job?
Severance pay stops when you accept a federal or District of Columbia position, unless it is a qualifying short-term appointment. If you are later involuntarily separated again, your severance is recomputed on all your service and current age, minus the weeks you already received, and it remains subject to the 52-week lifetime limit.