MILITARY UPDATE
Certain disabled retirees may be in line for restored pay

Military Update focuses on issues affecting pay, benefits and lifestyle of active and retired servicepeople. Its author, Tom Philpott, is a Virginia-based syndicated columnist and freelance writer. He has covered military issues for almost 25 years, including six years as editor of Navy Times. For 17 years he worked as a writer and senior editor for Army Times Publishing Co. Philpott, 49, enlisted in the U.S. Coast Guard in 1973 and served as an information officer from 1974-77.

By Tom Philpott

Career military retirees with VA disability ratings of 60 percent or higher are likely to gain some lost retired pay next January and see full restoration of their retirement benefits, on top of their VA compensation, by Jan. 1, 2007.

The details are set down in a concurrent receipt initiative designed by the House Budget Committee and moving smoothly through the legislative process on Capitol Hill.

Congressional sources say the only issue in doubt is whether lawmakers, most of whom face reelection in November, will go beyond the House committee plan and restore retired pay to more than the 82,000 retirees now targeted.

The House Armed Services Committee and the Senate Budget Committee intend to embrace the House Budget Committee plan, which would cost $516 million in 2003 and $5.8 billion through 2007. That's enough to phase in full concurrent receipt for retirees with disabilities rated 60 percent or higher.

Under present law, career retirees with service-connected injuries or illnesses see their retired pay reduced, dollar for dollar, by the amount they receive in VA disability compensation. The law has been in effect for more than a century.

The House committee plan would end it in phases for the most severely disabled retirees, including those who draw special disability payments from the Department of Defense of $50 to $300 Those payments would cease in January as the first portion of retired pay is restored.

The special payment formula, however, would be used as a starting point for concurrent receipt.

Here's how:

On Jan. 1, 2003, eligible retirees would see retired pay restored in an amount equal to 250 percent of that special disability pay. For 100-percent disabled retirees, retired pay would climb by $750 a month, 2 1/2 times the maximum $300 special payment. For 90-percent disabled, some of whom qualify for $200 in special pay, retired pay would rise by $500 a month. Those 80- and 70-percent disabled would receive $250 a month in retired pay and 60-percent disabled would get $125.

The phase-in of retired pay would continue during the next four years. In 2004, officials would calculate the difference between retired pay as restored in 2003 and the full concurrent receipt target in 2007 — and restore 20 percent of the difference. Another 20 percent would be tacked on in 2005, another 35 percent in 2006 and, finally, full retired pay in 2007.

Over five years, the typical retiree 60-percent disabled would see taxable income rise by $790 a month, or $9,480 a year. The 100-percent disabled retiree would see a jump of almost $2,200 a month, or $26,000 a year. The monthly gain would be $995 for 70-percent disability, $1,155 for 80 percent and $1,300 for 90 percent.

Sources on Capitol Hill, and among service associations, say they believe overwhelmingly that the House Budget Committee plan, at a minimum, will be adopted. This alone would be a stunning victory for concurrent receipt advocates, given how long the fight has lasted and the amount of dollars involved.

"It certainly looks good for some significant amount," said Steve Strobridge, director of government relations for The Retired Officers Association.

Left out of the House plan, however, are 85 percent of career retirees who have VA disabilities of 50 percent or less. That fight isn't over, even for this year. Sen. Harry Reid (D-Nev.) has introduced a bill, co-sponsored by the bipartisan leadership team of the Senate Armed Services Committee, to restore full retired pay to all career retirees with disabilities, regardless of severity.

Questions, comments and suggestions are welcome. Write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111, or send e-mail to: milupdate@aol.com.