Check out MOAA’s new brochure (Undue Sacrifice) for an easy to read version of this fact sheet.
Issue: Congress needs to fully eliminate the law that makes most disabled uniformed services retirees forfeit part or all of their military retired pay for VA disability compensation.
Background: For decades, MOAA has sought legislation providing full relief from the 19th century law that required a dollar-for-dollar offset of military retired pay for VA disability compensation. MOAA strongly believes retired pay is earned for a career of uniformed service, and VA disability compensation is recompense for pain, suffering, and lost future earning power due to service-connected disabilities.
Since we persuaded Congress to make the first very modest step in 2003 for a small, yet significant, group of disabled retirees, we’ve made steady incremental progress almost every year in broadening eligibility. In the ensuing 6 years, we’ve fully restored earned service-based retired pay for 100% disabled retirees with at least 20 years of service and all combat-disabled retirees without regard to length of service or percentage of combat-related disability.
Additionally, we’ve won a scheduled 10-year phase-out of the disability offset (to be completed by 2014) for retirees with 50% or higher-rated non-combat-related disabilities who have at least 20 years of service or were retired under the Temporary Early Retirement Authority of the 1990s.
Although these major improvements cover 304,000 disabled retirees, or 33% of the total disabled retired population, still 623,000 fund their disability compensation from the VA dollar-for-dollar from their retired pay.
MOAA Position: MOAA is committed to ending the disability offset for all disabled retirees. We believe strongly in the principle that career military members earn their retired pay by service alone, and that those unfortunate enough to suffer a service-caused disability in the process should have any VA disability compensation from the VA added to, not subtracted from their service-earned military retired pay. In the case of members forced into medical retirement before 20 years of service, their service-earned retired pay should be vested at the rate of 2.5% times years of service times the applicable pay base. There should not be any distinction between members disabled for combat- vs. non-combat-related causes, as the impact on their quality of life and future earning power is the same in either case.
Key Bills/Status: Several bills have been introduced in the 111th Congress that would continue to make progress to eliminate the remaining offsets. Congressman Gus Bilirakis (R-FL) has introduced H.R. 303, the Retired Pay Restoration Act and Congressman Jim Marshall (D-GA) has introduced H.R. 333, the Disabled Veterans Tax Termination Act. In the Senate Harry Reid has introduced S. 546, The Retired Pay Restoration Act of 2009.
Additionally, the White House has reintroduced their concurrent receipt proposal in the 2011 Budget. The proposal would phase in eligibility for new recipients over five years. The first three years opens CRDP eligibility to the more severely disabled Chapter 61 retirees with less than 20 years of service. The remaining two years of this phase-in extends CRDP to Chapter 61 retirees, regardless of years of service and VA rating.
The Administration’s proposal had been included in H.R. 4213, the “American Jobs and Closing Tax Loopholes Act of 2010. Unfortunatley lats minute negotiations removed the concurrent receipt provision before it passed the Senate. MOAA will work to have an amendment added to the FY2011 defense authorization bill.
