10 USC 1201 - Regulars and members on active duty for more than 30 days: retirement

(a) Retirement.— 
Upon a determination by the Secretary concerned that a member described in subsection (c) is unfit to perform the duties of the members office, grade, rank, or rating because of physical disability incurred while entitled to basic pay or while absent as described in subsection (c)(3), the Secretary may retire the member, with retired pay computed under section 1401 of this title, if the Secretary also makes the determinations with respect to the member and that disability specified in subsection (b).
(b) Required Determinations of Disability.— 
Determinations referred to in subsection (a) are determinations by the Secretary that
(1) based upon accepted medical principles, the disability is of a permanent nature and stable;
(2) the disability is not the result of the members intentional misconduct or willful neglect, and was not incurred during a period of unauthorized absence; and

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(3) either
(A) the member has at least 20 years of service computed under section 1208 of this title; or
(B) the disability is at least 30 percent under the standard schedule of rating disabilities in use by the Department of Veterans Affairs at the time of the determination; and either
(i) the disability was not noted at the time of the members entrance on active duty (unless clear and unmistakable evidence demonstrates that the disability existed before the members entrance on active duty and was not aggravated by active military service);
(ii) the disability is the proximate result of performing active duty;
(iii) the disability was incurred in line of duty in time of war or national emergency; or
(iv) the disability was incurred in line of duty after September 14, 1978.
(c) Eligible Members.— 
This section and sections 1202 and 1203 of this title apply to the following members:
(1) A member of a regular component of the armed forces entitled to basic pay.
(2) Any other member of the armed forces entitled to basic pay who has been called or ordered to active duty (other than for training under section 10148 (a) of this title) for a period of more than 30 days.

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(3) Any other member of the armed forces who is on active duty but is not entitled to basic pay by reason of section 502 (b) of title 37 due to authorized absence
(A)  to participate in an educational program, or
(B)  for an emergency purpose, as determined by the Secretary concerned.