Legislative Update 11 December 2015: MOAA To Congress: Repeal “Widows’ Tax”

We have No Action Items today.

 

Summary of Issues

At Issue 1. we see MOAA TO CONGRESS: REPEAL “WIDOWS’ TAX”MOAA testifies on SBP-DIC offset, With an important benefit for military survivors set to expire. Congress needs to act. (See Issue 1 below for the details. GF)

At Issue 2we see CONGRESS CAN’T MEET DEADLINE Short-term bill buys some time. With the government poised to shut down at midnight, lawmakers scramble to keep the lights on. (See Issue 2 below for the details. GF)

 

At Issue 3. we see GI BILL HOUSING BENEFIT CUT 

Stay abreast of impending changes. Congress levies a 50 percent housing cut for children using Post-9/11 GI Bill benefits. 

(See Issue 3 below for the details. GF) 

Collectively We Can and Are Making a Difference

 

FOR ALL, Please feel free to pass these Weekly Legislative Updates on to your group of Veteran Friends –

don’t be concerned with possible duplications – if your friends are as concerned as we are with Veteran issues, they probably won’t mind getting this from two or more friendly sources

 

ISSUES

 

Issue 1. MOAA TO CONGRESS: REPEAL “WIDOWS’ TAX”

December 11, 2015

MOAA’s Director of Government Relations, Col. Steve Strobridge, USAF (Ret.), testified before the House Armed Services military personnel subcommittee on Wednesday about the huge financial penalty imposed on 63,000 military survivors. Current law unfairly makes military survivors forfeit part or all of their military Survivor Benefit Plan (SBP) annuity when military service caused the member’s death.

SBP provides the survivor 55 percent of the servicemember’s military retired pay. Enrollment is elected at the time of retirement, and the retired member pays 6.5 percent of retired pay as a premium.

Dependency and Indemnity Compensation (DIC) is a VA program providing a $1,254 monthly annuity for survivors of veterans whose death is ruled service-connected. SBP payments are reduced dollar-for-dollar by DIC. This is often called the “widows’ tax.” MOAA has been seeking repeal of this unfair law for decades.

Rep. Joe Wilson (R-N.C.), whose proposed legislation to end the offset (H.R. 1594) has gathered 171 bipartisan cosponsors, reiterated his determination to see an end to the offset at the hearing.

In 2008, Congress authorized a modest Special Survivor Indemnity Allowance (SSIA) for SBP-DIC widows as a first step toward phasing out the offset.

“Because of budget issues, our hope has been Congress would do that by steadily increasing the SSIA amounts,” Strobridge said. “As of FY 2017, the $310 monthly SSIA will restore about 25 percent of the offset.”

However, SSIA is set to expire Oct. 1, 2017, and Congress needs to extend the SSIA in the upcoming FY17 defense bill or survivors will forfeit the $310 monthly allowance.

“You have [our] support because you have been so effective outside of this hearing in our offices… the argument that you’ve made in my opinion is incontrovertible, and you’ve made it on its merits, on the facts,” said Rep. Beto O’Rourke (D-Tex.) to the panel.

Though committee members acknowledged the inequity of the offset, Ranking Member Susan Davis (D-Calif.) pointed out that a full repeal has a price tag approaching $7 billion, and securing funds will be difficult.

“We’re sensitive to the [funding] challenge,” said Strobridge. But he noted, “When congressional leaders recently managed to find far larger [funding] to provide Medicare premium relief to millions of wealthier beneficiaries, it’s hard to explain to SBP-DIC widows – who have suffered five-digit annual losses for decades – why their situation gets lower priority.”

Even in a budget-constrained environment, fair treatment for survivors of servicemembers who gave their lives for their counry shouldn’t be last in line for funding. Congress needs to extend and increase the SSIA in the FY17 National Defense Authorization Act.

Issue 2.  CONGRESS CAN’T MEET DEADLINE 

December 11, 2015

As negotiations over a $1.1 trillion dollar funding bill fell apart, Congress quickly scrambled to put together a short-term deal to keep the government funded until Dec. 16. Without the measure, the government faced a shutdown at midnight on Dec. 11.

Five additional days gives Congress scant time to resolve their differences on how to fund the government. The White House has said that it will sign the five-day continuing resolution (CR), but won’t support a long-term one.

Progress on a yearlong deal crumbled as lawmakers failed to resolve several divisive policy disputes.

The government has operated under a CR since Oct. 1 as part of a wider deal to increase the debt ceiling and lift defense spending caps.

Unfortunately, CRs aren’t an uncommon phenomenon. . (See Issue 3 below for the details.

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MOAA hopes this short extension will finally provide Congress enough time to pass a long-term funding bill.

– See more at: http://www.moaa.org/Content/Take-Action/Top-Issues/Currently-Serving/Congress-Can-t-Meet-Deadline.aspx#sthash.aXveaSCM.dpufDecember 11, 2015

As negotiations over a $1.1 trillion dollar funding bill fell apart, Congress quickly scrambled to put together a short-term deal to keep the government funded until Dec. 16. Without the measure, the government faced a shutdown at midnight on Dec. 11.

Five additional days gives Congress scant time to resolve their differences on how to fund the government. The White House has said that it will sign the five-day continuing resolution (CR), but won’t support a long-term one.

Progress on a yearlong deal crumbled as lawmakers failed to resolve several divisive policy disputes.

The government has operated under a CR since Oct. 1 as part of a wider deal to increase the debt ceiling and lift defense spending caps.

Unfortunately, CRs aren’t an uncommon phenomenon.

(Click on wider deal and uncommon phenomenon here or above for more details. GF)

MOAA hopes this short extension will finally provide Congress enough time to pass a long-term funding bill.

(Click on  CONGRESS CAN’T MEET DEADLINE  here or above and go to the end of that page if you wish to rate content of this issue. GF)

Issue 3. GI BILL HOUSING BENEFIT CUT 

December 11, 2015

The Post-9/11 GI Bill includes a generous housing allowance that enables student veterans to pursue their education or training goals on a full-time basis in most cases.

The benefit is pegged to the active duty housing allowance for an E-5 family of four at the location of the college or training facility where the student is enrolled. Full-time online students get a set rate for their housing.

Service men and women who serve six or more years in a uniformed service and agree to reenlist or extend their service for another four years earn the right to transfer their new GI Bill entitlement to their spouses and dependent children.

But the housing allowance will be cut in half for future GI Bill transfers to children.

Senate lawmakers matched House action this week by levying a 50 percent housing cut for children with transferred Post-9/11 GI Bill benefits. The change does not apply for members who already have transferred benefits to their children.

The House version of the provision would also raise the minimum service requirement to 10 years’ service with an agreement to serve two more years to secure GI Bill transfer rights. The final Senate language was not available at the time of this writing, but is expected to be the same.

MOAA testified earlier this year that DoD and the Services should retain the authority to set the service requirements for transferring the GI Bill to match force needs, not the Veterans Affairs Committees. In the end, the House adopted a recommendation of the Military Compensation and Retirement Modernization Commission (MCRMC) to change the transfer rules.

Spouses with transferred benefits may use their GI Bill immediately. Children must be 18 years old and the sponsor must have completed at least 10 years’ service before they can access the benefit under current rules.

The housing allowance cut applies only to children with (future) transferred benefits. Spouses will receive the current rate going forward.

Transfer contracts in place prior to 180 days after the date of enactment of the legislation will be grandfathered. Transfer contracts signed after that date will be subject to the lower housing rate.

The MCRMC found that the GI Bill housing benefit often exceeded the actual cost of housing at colleges and recommended it be ended for dependents. But the Veterans Affairs Committees agreed to keep the current benefit for spouses and reduce the amount by 50 percent for children.

MOAA urges families who meet or exceed the current six year service requirement to carefully consider their options on GI Bill transferability. They will have only six months after the bill is signed into law to decide if they want to preserve the current housing rate for their kids by agreeing to serve another four years (after completing at least six) under a transfer-of-benefits reenlistment or service extension contract. (Click on transfer-of-benefits reenlistment here or above for more details. GF)

   

 

   
   
   

That’s it for today- Thanks for your help!