38 U.S.C. § 4304: Character of service

A person’s entitlement to the benefits of this chapter by reason of the service of such person in one of the uniformed services terminates upon the occurrence of any of the following events:(1) A separation of such person from such uniformed service with a dishonorable or bad conduct discharge. (2) A separation of such person from such uniformed service under other than honorable conditions, as characterized pursuant to regulations prescribed by the Secretary concerned. (3) A dismissal of such person permitted under section 1161(a) of title 10. (4) A dropping of such person from the rolls pursuant to section 1161(b) of title 10.