By MOAA Staff

MOAA’s long fight to end an unfair pay offset faced by combat-injured veterans has never come with a price limit – for those who’ve served and sacrificed, financial pressures aren’t an excuse to deny earned benefits.

However, even some supporters in Congress have pointed to the cost of a legislative fix – the Major Richard Star Act – as a reason for the long delay in ending the “wounded veteran tax.” And a cost estimate for the bill released March 23 by the Congressional Budget Office (CBO) could further complicate such discussions.

[TAKE ACTION: Ask Your Lawmakers to Support Combat-Injured Veterans]

The Basics

Medically retired veterans eligible for Combat-Related Special Compensation (CRSC) are not eligible to receive both earned retirement pay and VA disability pay – one offsets the other, meaning some do not receive any retirement pay. These are two different payments for two different purposes, one recognizing years of service and the other providing disability compensation.

The Major Richard Star Act, as envisioned by advocacy groups like MOAA and other supporters, would end this offset and ensure these medically retired veterans with combat-related disabilities receive full retirement pay and VA disability compensation. Doing so would cost $13 billion over 10 years, according to the CBO estimate. That figure could end up lower, as some retirees may choose to keep their existing tax-free CRSC benefit rather than receive Concurrent Retired and Disability Pay (CRDP).

However, the full CBO score of the Major Richard Star Act sits at $78 billion over 10 years – $65 billion above the initial figure.

[MOAA SITREP: The Major Richard Star Act]

The Breakdown

The Major Richard Star Act has been introduced in multiple congressional sessions with adjustments made to legislative language over time. In its current draft, the bill would not only address the offset for combat-injured medical retirees, but also would extend CRDP eligibility to a significantly broader population of Chapter 61 retirees.

Specifically, the current draft would also eliminate the offset for:

• Chapter 61 military retirees with fewer than 20 years of service
• Chapter 61 retirees with at least 20 years of service and a 40% or lower disability rating

This broader application extends beyond combat-related disabilities and would cover approximately 255,000 more retirees, accounting for the additional $65 billion in projected cost.

While this expanded scope is reflected in the CBO estimate, it does not align with the original, longstanding objective of the Major Richard Star Act: to correct the inequity faced by medically retired veterans whose disabilities are directly tied to combat.

Earlier versions of the legislation – and recent amendment language proposed to both the FY 2026 National Defense Authorization Act and appropriations legislation – have reflected this more targeted approach by limiting eligibility to combat-injured medical retirees. Those versions have consistently received significantly lower cost estimates, generally $10 billion to $13 billion over 10 years.

The Way Forward

The legislative process provides an opportunity to ensure the policy is aligned with its intended purpose. Clarifying the scope of eligibility will be key to ensuring the bill delivers relief to combat-injured veterans without introducing unintended expansions that drive up cost and complicated passage.

MOAA will continue to advocate for a solution that fully removes the offset for medically retired veterans with combat-related disabilities and fully restores the benefits they earned through their service and sacrifice. Given their profound sacrifices, those with combat-related injuries must be the first priority. While individuals with non-combat disabilities are deserving of support, they should be addressed through a separate framework distinct from the remedies reserved for those wounded in service to their country.

As a founding member of The Star Act Alliance, MOAA stands ready to work with lawmakers to refine the legislation so it achieves this goal.

MOAA members can help by adding their voice to the cause: The Major Richard Star Act is one of four key priorities we’ll bring to Capitol Hill on April 15 as part of Advocacy in Action, our signature advocacy event. The more messages we’re able to send to lawmakers, the greater the effect of our visits to hundreds of congressional offices.

Keep up with the latest on this bill and other MOAA priorities at our advocacy news page.