MILITARY COMPENSATION OFFSETS: For most of the century, the military compensation system has been riddled with a confusing maze of offsets (i.e., benefit deductions) intended to constrain compensation payments and limit government costs. More than a decade of intensive education efforts by The Military Coalition, along with the graphic examples of inequities facing veterans and survivors of current and past conflicts, have convinced Congress that many of the offsets are unfair, as indicated by the following list of victories: . 1999: repealed retired pay penalty for officers working as federal civilians; . 1999: won the first easing of the disability offset to retired pay for severely disabled retirees; . 2001-03: expanded full concurrent receipt to all combat-disabled servicemembers with 20 or more years of service and won a 10-year phase-out of the disability offset for others with 20-plus years; . 2004: won a four-year phase-out of the Survivor Benefit Plan (SBP) annuity reduction imposed on survivors age 62 and older (intended as an offset to Social Security); . 2004: won full, immediate concurrent receipt for 100-percent disabled servicemembers with 20-plus years; and . 2005: accelerated the effective date of full concurrent receipt for unemployables.
And those changes proved only a start, as the tide of philosophical change has generated more and more cracks in the logic behind the offsets. In 2007, there have been several new developments of major significance: . The Dole-Shalala wounded warrior task force recommended (and the Bush administration endorsed) repeal of the deduction of military disability separation pay from VA disability compensation. . The Veterans Disability Benefits Commission recommended elimination of any deduction of service-earned retired pay from VA disability compensation and elimination of the deduction of VA Dependency and Indemnity compensation from survivors' SBP annuities if the death was caused by service. . The new FY 2008 Defense Authorization Act authorizes full concurrent receipt for all combat-disabled servicemembers forced into medical retirement before 20 years of service, full concurrent receipt for unemployables, and at least some modest payment to SBP-DIC survivors in recognition of the inequity of the offset.
Unfortunately, most of these improvements were won despite strong objections from DoD and whichever (Clinton or Bush) administration was in place at the time (the notable exception being the Dole-Shalala recommendation on military disability separation pay, which the current administration has endorsed).
The past years of progress, along with the dramatic developments in 2007, show that "it's always been that way" arguments are losing their credibility. Now, we're winning more focus on what the payments actually are for and whether offsets serve that purpose. Congress has recognized that the disability offset to retired pay and the DIC offset to SBP are wrong, and we're now only talking about finding the money to fix those inequities. The next logical move is to examine the various separation pays that are subject to offset by VA disability compensation and reserve retired pay. Current law, in effect, treats separation pays as advances on retired pay. MOAA among others, disagrees with that. We think a main purpose of separation pay is to help servicemembers offset the expense of transition to post-military life, and amounts paid for that purpose shouldn't be subject to later recoupment from reserve retired pay or VA compensation. Past progress on the disability and survivor offsets gives hope for the future on easing separation pay inequities, too. [Source: MOAA News Exchange Steve Strobridge article 2 Jan 08 ++]