Someone asked me what the latest on Concurrent Receipt and SBP was......

Since 12-02-05

From: Waspscpo@aol.com [mailto:Waspscpo@aol.com]
Sent: Thursday, December 01, 2005 11:28 AM
To: undisclosed-recipients:
Subject: Excerpts from this week's Navy Times (Concurrent Receipt update)

Someone asked me what the latest on Concurrent Receipt and SBP was......

Survivor benefits

The Senate approved a two-part upgrade to survivors’ benefits, which the Pentagon opposes. The House bill did nothing similar.A Senate amendment, sponsored by Sen. Bill Nelson, R-Fla., eliminates the current dollar-for-dollar offset in military survivor benefits when a survivor also is eligible for Dependency and Indemnity Compensation, or DIC, from the Department of Veterans Affairs.

The VA benefit, currently $993 but expected to increase to $1,033 with the next annual cost-of-living adjustment in disability and survivor pays, goes to a surviving spouse when a member dies on active duty or of a service-connected cause or was 100 percent disabled under certain other conditions. The offset “mistreats” the survivors of service members, Nelson said.

A second part of his amendment would advance the effective date of a move to stop requiring Survivor Benefit Plan premium payments after a retiree has paid into the plan for 30 years. Under a 1999 law, the premium cutoff is to take effect Oct. 1, 2008, but Nelson would make it effective immediately. The changes in the so-called SBP/DIC offset is one of the top legislative priorities for military and veterans’ groups this year, and House negotiators will be pressed to accept the Senate plan.

Again, the Bush administration will fight; the Pentagon is urging negotiators to drop Nelson’s plan, arguing that it is expensive and unnecessary, particularly in light of upgrades to two other primary survivor benefits in recent years: Servicemembers’ Group Life Insurance and the death gratuity. The cost of Nelson’s plan is indeed large: an estimated $9.3 billion over 10 years. The House has tighter legislative budget rules than the Senate and might be unable to approve the plan without a way to pay for it.

Helping Senior Enlisteds...
Lawmakers are being asked to look out for the interests of senior enlisted members who are often bypassed on benefits increases because they are beyond the point at which re-enlistment bonuses and incentives are offered. Negotiators must decide whether to raise household-goods weight allowances for E-7s, E-8s and E-9s, something included in the House bill but not approved by the Senate. Rep. Tom Latham, R-Iowa, has been the chief sponsor of legislation to increase shipping limits for senior enlisted troops, but he will not take part in the authorization bill negotiations because he is a member of the House Appropriations Committee member, not the House Armed Services Committee, from which negotiators will be drawn. But several co-sponsors are on the armed services committee and could help press the issue, first raised by the Fleet Reserve Association. If the plan is approved, the Congressional Budget Office does not expect senior members to use their full shipping privileges. CBO suggests the average shipment weight would increase by about 275 pounds.

Reserve retirement
A big difference between active and reserve retired pay, besides the amount of the checks, is that active-duty troops start getting checks as soon as they retire, while Guard and reserve members must wait until age 60.Congressional negotiators will decide whether to make a modest change as they consider a Senate-passed provision to reduce the reserve retirement age by three months for every three months of continuous active duty.

The minimum retirement age would be 50, and mobilizations since Sept. 11, 2001, would count. Sen. Saxby Chambliss, R-Ga., co-chairman of the Senate Reserve Caucus and chief sponsor of the amendment, said he knows the proposal is less generous than some other ideas, but the cost — $320 million over five years — is modest and rewards reservists who have been mobilized most often, whereas other initiatives have provided earlier retirement based on length of service.

The House version of the defense bill includes no similar plan. Military advocacy groups, particularly those representing the Guard and reserve, support the Chambliss plan because it at least sets a precedent that could lay the foundation for further changes.

Concurrent receipt
The House and Senate defense bills agree that military retirees who have 100 percent disability ratings from the VA because they cannot work should get their full veterans’ disability and military retired pay. They just can’t agree on when to do it — and the dispute has major ramifications. The Senate would make the change right away, at an estimated cost of $1 billion over five years. The House would wait until Oct. 1, 2009, delaying the expense.

Either proposal would be better than current law, which requires disabled retirees rated as unemployable by the VA to wait until 2014 to receive both full retired and disability pay. The issue is the newest chapter of the so-called concurrent receipt saga, referred to by affected veterans as a “disability tax.” It is a century-old government policy of reducing military retired pay by any amount received in veterans’ disability compensation.

The policy is phasing out, with full concurrent receipt already allowed for veterans with combat-related disabilities. Those with non-combat disabilities rated at 50 percent or more were to have the offset in their retired pay phased out over 10 years. Last year, Congress decided that veterans with 100 percent disability ratings from service-connected but non-combat conditions should be allowed full concurrent receipt without waiting until 2014. But Congress, faced with a demand to fully pay for any new benefits, wrote the authorizing language so that veterans rated as totally disabled solely because they cannot work weren’t specifically included.

This was done purposely in the hope that the Pentagon would be creative in interpreting the law so the “unemployables” received the same benefits as other 100 percent disabled retirees. The Pentagon was willing, but the White House Office of Management and Budget refused, throwing the issue back to Congress. The House Armed Services Committee, trying to reduce the cost, ordered unemployables covered as of Oct. 1, 2008 — four years and three months earlier than under the phased 10-year timeline in the law.

Sen. Harry Reid of Nevada, the Senate Democratic leader and longtime sponsor of concurrent receipt legislation, persuaded the Senate to cover unemployables effective Dec. 31, 2004, the date they would have been covered if lawmakers had not tried to play budgetary games last year.

Reid’s plan has the backing of major military associations, but its higher cost is likely to draw complaints from White House and Pentagon budget officials. That leaves negotiators in a difficult position of keeping a promise to disabled retirees or spending defense funds that could be badly needed in the face of rumored major cuts in weapons programs looming in 2007.
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Contributed,
YNCS Don Harribine, USN(ret)