January 23, 2009
| How Does the Stimulus Package Affect You? We’ve received lots of questions from members as to whether the payroll tax cut in the House-proposed economic stimulus package would affect retirees, Social Security annuitants and VA disability compensation recipients. So we went to the source and got some answers. |
| Disability Review Board On-Line Veterans medically separated since 9/11 can now submit an application to the Physical Disability Board of Review (PDBR) to have their records reviewed to potentially increase their disability rating. |
| DoD Offers Expedited Disability Process The Pentagon has established a new policy that allows the service secretaries to offer an expedited Disability Evaluation System (DES) process to servicemembers who sustained catastrophic injuries or illnesses. |
| Key Hill Committee Lists The House and Senate Armed Services Committees have released their respective lists of Committee members for the 111th Congress. |
| Early Reserve Retirement Update New rules governing how activated reservists can be credited for a retirement date before age 60 have good and bad features. Find out what the rules are. |
| Inauguration 2009 Fast Facts Watching the inauguration of President Obama inspired the MOAA staff to research the military’s role in this and past inauguration days. |
How Does the Stimulus Package Affect You?
Many MOAA members have asked whether the income tax cuts in the economic stimulus package proposed by Congress would affect retirees as well as the currently employed.
Now that the Senate Finance Committee has offered its version of the stimulus package, we can give you a better answer, though these deals are far from done.
The House- and Senate-proposed payroll tax reductions are the same. Both would reduce income tax withholding and liability by $500 for singles and $1,000 for married couples. These reductions would apply only to people who are currently employed. They wouldn’t apply to retirees.
At press time, both the House and Senate bills would start phasing out the tax cut for people making more than $75,000 a year ($150,000 for married couples). The House bill would end the tax deduction for those with incomes of more than $100,000 ($200,000 for married couples). The Senate bill would deny any relief to those with incomes above $87,500 ($175,000 married).
The Senate-proposed package (but not the House plan) has a separate provision that would provide a one-time $300 payment to Social Security annuitants and recipients of VA disability compensation.
We asked the Senate Finance Committee staff whether a disabled vet who is also currently working would qualify for both the income tax reduction and the $300 lump sum payment. The answer was that the intent is to provide a maximum total payment of $500 (single) or $1,000 (married).
But as a practical matter, a working disabled vet would probably get the $300 payment first, and would also see the full reduction in the income tax withholding from his/her employer. The rub would come at the end of the year, when such people could find themselves “under-withheld” by $300.
In other words, if they get the $300 up front and also qualify for the maximum $500/$1,000 tax withholding, they’ll end up having the pay the $300 back in taxes at the end of the year. So if you’re a working disabled vet, you may want to ask your employer to increase your withholding by enough to make up the $300 difference by the end of the year.
Disability Review Board On-Line
The Physical Disability Board of Review (PDBR) is now accepting applications from veterans who were medically separated since Sept. 11, 2001 who wish to have their records reviewed for a possible increase in their disability rating and qualification for medical retirement.
The board can consider applications from veterans who were/are medically separated between September 11, 2001, and December 31, 2009 with a disability rating of 20% or less and not found eligible for retirement.
The application form DD-294 is available on-line.
By law, the PDBR will reassess whether an applicant’s rating should be raised, possibly to 30% or higher, which would make the person eligible for lifetime military retired pay and TRICARE coverage for themselves and their dependent family members.
In the process, the PDBR will:
- Examine the applicant's disqualifying condition for their medical separation
- Ensure the action was fair and accurate
- Compare the DoD and Veterans' Affairs ratings
- Make a recommendation as to whether the rating should be changed
The Board cannot lower a veteran’s current disability rating, and any positive change to the rating will result in the military records being corrected.
However, MOAA is concerned that the scope of the PDBR is very limited and may be unlikely to result in very many disability rating upgrades.
For one thing, the PDBR can only look at the condition(s) originally deemed by the service as the reason for the member’s unfitness to continue serving. It can’t consider any medical conditions other than those that the parent service might have disregarded in developing the original disability rating. That is, if the member had several different conditions, but the service cited only one as the reason for discharge, the other conditions can’t be considered in the PDBR deliberations.
Further, a member who applies to the PDBR cannot subsequently ask their service Board of Correction of Military/Naval Records (BCMR/BCNR) to review the same issue of whether they should have received a higher rating for the same medical condition(s) that resulted in their separation.
In contrast, an application to the service BCMR/BCNR permits consideration of all evidence submitted, including evidence that the service failed to give adequate consideration to other unfitting conditions in making the original rating.
Eligible veterans should review the Frequently Ask Questions posted on the PDBR website to determine which board best suits their specific needs.
DoD Offers Expedited Disability Process
Earlier this month, the Pentagon established a new policy that allows the service secretaries to offer an expedited Disability Evaluation System (DES) process to service members who sustained catastrophic injuries or illnesses from combat or combat-related operations.
In a January 6, 2009
memorandum, the Defense Department outlined the new guidelines, expressing the Department’s belief that “there must be a special process for those members who sustain catastrophic disabilities while participating in combat or combat-related operations, in contrast with those disabled otherwise.”
However, the policy change also allows service secretaries the option to offer the expedited process on a case-by-case basis to catastrophically injured or ill members whose condition was not combat-related.
The new process is expected to offer a rapid transition of the next stage of a severely injured member’s recovery process while providing quicker access to benefits, compensation, and specialty care offered by the Department of Veterans Affairs.
Eligible servicemembers (or their designated representatives) will be given the choice to voluntarily waive the regular DES and opt for immediate processing to the Permanent Disability Retirement List (PDRL) with a 100% disability rating. The projected timeline from decision to departure on transition leave is expected to be less than 45 days.
Key Hill Committee Lists
House Armed Services Committee (HASC) Chairman Ike Skelton (D-MO) and Ranking Minority Member John McHugh (R-NY) have posted the list of HASC members for the new 111th Congress on the committee’s web site.
Newly assigned Democrats to the committee include Reps. Jim Langevin (RI), Madeleine Bordallo (GU), Glenn Nye (VA), Chellie Pingree (ME), Larry Kissell (NC), Martin Heinrich (NM), Frank Kratovil (MD), Eric Massa (NY), and Bobby Bright (AL)
New Republican committee members include Reps. Rob Wittman (VA), Mary Fallin (OK), Duncan D. Hunter (CA), John Fleming (LA), Mike Coffman (CO), and Tom Rooney (FL)
See the full HASC list.
On the Senate side, there was much less turnover, with the only new member being Sen. Roger Wicker (R-MS).
See the full Senate Armed Services Committee roster.
Early Reserve Retirement Update
The good news is that the Pentagon has issued draft regulations to implement a new law that authorizes a reduced retirement age for Guard and Reserve members who complete qualifying active duty service since January 28, 2008.
Under the new rules, each qualifying cumulative 90 days of active duty or active duty for training since that date will generate a 3-month reduction in the age (normally age 60) at which the member qualifies for Reserve retired pay. Reservists with enough qualifying active duty time could be able to retire as early as age 50 under the law.
Click here for more.
Inauguration 2009 Fast Facts
Did you know:
- The military has taken part in every presidential inauguration (there have been 56) since George Washington’s on April 30, 1789
- The Inaugural Parade is organized by the Armed Forces Inaugural Committee, which first took on this responsibility for President Eisenhower’s parade in 1953
Click here for more.
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