2025 Transgender Military Ban: What It Means, Your Options, and Next Steps

CURRENT AS OF 6 MAR 2025

Understanding the OSD Policy

On February 26, 2025, the Office of the Under Secretary of Defense for Personnel and Readiness (OSD P&R) issued a memorandum enforcing Executive Order 14183, effectively reinstating a ban on transgender service members. The new policy states that individuals with a current diagnosis, history, or symptoms of gender dysphoria are ineligible for military service and will be processed for separation​.

This policy rescinds prior directives that allowed for in-service transition and gender-affirming medical care, barring access to cross-sex hormone therapy, surgeries, and accommodations for gender identity​. Additionally, it mandates that all service members adhere to the standards of their assigned sex at birth in fitness tests, grooming, uniforms, and facility use​.

Key Points of the Ban

1. Service in Sex Assigned at Birth

Under the new policy:

• The DoD recognizes only male and female based on biological sex.
• Service members must adhere to the fitness, grooming, and uniform standards associated with their assigned sex at birth.
• Pronouns, salutations (e.g., “Sir” or “Ma’am”), and access to facilities (showers, berthing, bathrooms) must match biological sex​.

2. Voluntary Separation

• Transgender service members may voluntarily separate under an honorable discharge​.
• If you choose to voluntarily separate by 26 March you will not be required to repay bonuses or special pays.
• The deadline to request voluntary separation is March 26, 2025.
• If you have less than six years of service, you are not eligible for separation pay​.
• If you have six or more years, you may qualify for Voluntary Separation Pay (VSP) at 2x the amount of Involuntary Separation Pay (ISP)​.

3. Involuntary Separation

If a service member does not opt for voluntary separation, they will be processed for involuntary separation:

• Identification of impacted service members must be completed within 30 days (by March 28, 2025)​.
• Notification of separation will occur within the next 30 days (by April 27, 2025)​.
• You may be required to repay bonus and special pay.
• An Administrative Separation Board (enlisted) or Board of Inquiry (officers) will review each case.
• Discharge could take months but is expected to be completed before the end of FY25​.

Involuntary Separation Pay (ISP) Calculation

If honorably discharged, a service member may qualify for Involuntary Separation Pay (ISP), which is calculated as:ISP=10%×(YearsofService)×(12×MonthlyBasicPay)ISP = 10\% \times (Years of Service) \times (12 \times Monthly Basic Pay)ISP=10%×(YearsofService)×(12×MonthlyBasicPay)

Example: An E-5 with 10 years of service and a monthly basic pay of $4,234.50:ISP=10%×(10×(12×4,234.50))ISP = 10\% \times (10 \times (12 \times 4,234.50)) ISP=10%×(10×(12×4,234.50)) ISP=10%×(10×50,814)ISP = 10\% \times (10 \times 50,814) ISP=10%×(10×50,814) ISP=10%×508,140=50,814ISP = 10\% \times 508,140 = 50,814 ISP=10%×508,140=50,814

This amount is subject to federal (25%) and state taxes, leaving a take-home amount of approximately $38,110​.

4. Temporary Early Retirement Authority (TERA)

TERA allows service members with between 18 and 20 years of service to retire early with reduced benefits​.

• Eligibility:
  • Must have at least 18 years of active service but less than 20 years.
  • Retirement benefits are calculated at a reduced rate using a multiplier based on years of service.
  • Not all applicants are approved—it is at the discretion of the service branch​.
• NOTE
  • TERA as a policy allows from 15-20 years, but as activated, is only being offered to service members with 18-20 years
  • TERA was approved by the 2019 NDAA and expires DEC 2025. It has not been renewed past this date and may not be available after that date.
  • TERA is based on your date of separation being 18-20 years, not when separation begins.

How to Calculate TERA

Formula for Retired Pay under TERA:

RetiredPay=(High−36MonthlyPay)×(YearsofService×2.5%)×(ReductionFactor)Retired Pay = (High-36 Monthly Pay) \times (Years of Service \times 2.5\%) \times (Reduction Factor)RetiredPay=(High−36MonthlyPay)×(YearsofService×2.5%)×(ReductionFactor)

Example:

• E-7 with 18 years of service, a high-36 average pay of $4,500, and a reduction factor of 0.96667​.

RetiredPay=(4,500)×(18×2.5%)×(0.96667)Retired Pay = (4,500) \times (18 \times 2.5\%) \times (0.96667)RetiredPay=(4,500)×(18×2.5%)×(0.96667) RetiredPay=4,500×0.45×0.96667=1,952.77Retired Pay = 4,500 \times 0.45 \times 0.96667 = 1,952.77RetiredPay=4,500×0.45×0.96667=1,952.77

This means monthly retired pay would be approximately $1,953, subject to annual COLAs and potential tax withholding​.

Final Thoughts: Making the Best Decision for Your Future

The 2025 transgender ban is a major shift in military policy that impacts thousands of service members. Whether you choose to voluntarily separate, go through involuntary separation, or retire, it’s critical to understand your options, protect your benefits, and plan for what comes next.

For those early in their careers, the future is uncertain, and policies on separation pay for those under six years of service remain unclear. Those with 6+ years have more financial options, while those with 18-20 years should explore TERA eligibility to retain retirement benefits. If you have 20+ years of service, you qualify for a full retirement.

Regardless of your path, the most important thing is to stay informed, take control of your transition, and seek support.

Next Steps: What You Should Do Now

✅ Determine Your Eligibility – Find out if you qualify for voluntary separation, involuntary separation, TERA, or full retirement.

✅ Seek Legal Guidance – Talk to your local JAG, or more importantly a Defense Lawyer (Your JAG can help connect you)

✅ Understand Your Benefits –

• Visit Military OneSource (www.militaryonesource.mil) for transition and family support.
• Check VA.gov (www.va.gov) for disability compensation, healthcare, and education benefits.

✅ Prepare for Civilian Transition –

• Start building your resume and connecting with military-to-civilian career resources.
• Explore education benefits like the GI Bill (www.va.gov/education/about-gi-bill-benefits).

✅ Document Everything – Secure copies of medical records, performance evaluations, and any discrimination-related incidents that could support future claims or legal action.

✅ Find a Support Network –

• Join SPARTA (www.spartapride.org), a network of transgender service members and veterans.
• Connect with OutServe-SLDN (www.outserve.org) for advocacy and resources.

You Are Not Alone

This policy change is deeply unfair, but you still have options. Whether you continue fighting for your career, transition to civilian life, or retire, there is a future for you.

If you need legal support, financial advice, or just someone who understands, reach out to the organizations listed above. You deserve dignity, respect, and support—no matter what comes next.

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