Closing a Loophole That Reduces Retirement and/or Disability Pay For Certain Veterans (H.R. 333)

What is H.R. 333?

(Updated November 17, 2020)

This bill would allow veterans who have a service-connected disability rating of less than 50 percent to receive veterans’ disability compensation and retired pay simultaneously. It would also cover eligible retirees who had a service-connected disability rated at 30 percent or more and were forced to retire before attaining 20 years of service (also known as Chapter 61 retirement). These veterans may still be subject to some reduction in benefits due to concurrent receipts while they are phased into the system.

This would close a gap which prevents veterans from receiving the full amount of both their retirement pay and disability compensation, which is known as ‘concurrent receipt’. As the CBO explains: “Combat-related special compensation is exempt from federal taxes, but concurrent retirement and disability compensation is not; some veterans qualify for both types of payment, but they must choose between the two.”

Argument in favor

The retirement pay and disability compensation veterans receive is reimbursement for two separate aspects of their service, and they should be paid in full for both.

Argument opposed

This bill would potentially allow veterans to draw funds from three sources - the Department of Defense, the VA, and Social Security Disability. We need to find a simpler way to honor our commitments to veterans.

Impact

Veterans who would qualify based on their disability rating and service time, program administrators at the Department of Defense and VA.

Cost of H.R. 333

A CBO cost estimate is unavailable.

Additional Info

Of Note: A 2014 Government Accountability Office (GAO) report found that there were 59,251 veterans who received concurrent benefits from the DOD retirement system, the VA disability compensation, and Social Security Disability Insurance (SSDI). A random sample of seven veterans yielded a range of total benefits paid to individual veterans from $19,210 to $152,719.

The Heritage Foundation published a report which noted that the Social Security Administration doesn’t consider VA disability compensation when computing SSDI benefits. This means that veterans receiving concurrent payment would receive the same amount from SSDI regardless of what they receive in disability compensation from  the VA.

Media:

• Sponsoring Rep. Sanford Bishop (D-GA) Press Release (Previous Version)
• National Taxpayers Union - CBO Cost Estimate (Previous Version)
• American Military Retirees Association (In Favor)
• House Committee on Veterans’ Affairs - Witness Testimony (In Favor)
  

Summary by Eric Revell
(Photo Credit: Flickr user North Charleston)