To amend title 10, United States Code, to eliminate the recoupment of separation pay, special separation benefits, and voluntary separation incentive payments from members of the Armed Forces who subsequently receive disability compensation under laws administered by the Department of Veterans Affairs and to impose limitations on the authority of the Secretary of Defense to recoup such pay from members who subsequently receive military retired or retainer pay.

Restore Veterans' Compensation Act of 2017

This bill eliminates the recoupment of separation pay, special separation benefits, and voluntary separation incentive payments from members of the U.S. Armed Forces who subsequently receive Department of Veterans Affairs disability compensation. Disability compensation amounts may not be reduced because of the receipt of separation, severance, or readjustment pay.

Recoupment of separation payments from members receiving retired or retainer pay is limited to the net amount of separation payments. Monthly deductions are limited to 25% of retired or retainer pay and may not begin until 90 days after the Department of Defense (DOD) notifies the individual of such deductions. DOD may waive such recoupment for financial hardship reasons.