END OF THE UNFAIR DOD/SPB – VA/DIC "WIDOWS' TAX"

BY: Jennifer Barnhill December 20, 2019

‘Widow’s Tax’ finally axed when the President signed the National Defense Authorization Act for FY 2020.

As the President signed the National Defense Authorization Act Friday night, a 40-year battle to repeal the military “widow’s tax” came to an end.

Surviving families joined forces with advocates and lawmakers to pass nonpartisan legislation, with Congress putting actions in front of words and dollars in the hands of those who paid the ultimate price. The “widow’s tax” was a longstanding policy oversight that affected over 65,000 military survivors. When a service member dies while on active duty or from a military-related illness their families may be eligible for both the Survivor Benefit Plan (SBP) & Dependency and Indemnity Compensation (DIC). Because of concurrent receipt laws (provisions to avoid double-dipping in government benefits), for every dollar paid out via the DIC, one dollar was deducted or “offset” from the SBP insurance payment. This offset cost families roughly $11,000 annually. Not only have these families lived through the nightmare of losing a spouse or loved one, they have had to fight to stay afloat both emotionally and financially.

In 2013, Gold Star widow Kathy Prout started the Military Widows: SBP-DIC Offset Facebook Group as a way for survivors to share their concerns about the offset and related legislation. What began with six members grew to over 2,000 today.

“With privacy laws you can’t find anybody. You can’t find another widow unless somebody says ‘I know somebody,’” Prout said. Over time — and with the power of social media — this group grew in number and purpose.

Prout, who is a teacher, used lesson plans to create a plan of the week with assignments to call representatives who were on the fence.

“Everybody in the [Facebook] group was responsible for calling their own congressmen and senators weekly to remind them about the issue and to keep this on the front burner,” she explained.

One key focus of their effort was coupling consistency with kindness. When cosponsors signed on to support the repeal of the offset, she instructed members to write thank you letters. No one was to be shamed for not signing. Instead, they were to be educated. They didn’t take out frustrations on congressional staffers, who they now knew by name. They helped make supporting their cause easier.

“We provided all the information. Staffers have too many issues [to research] … there is no time in the day,” Prout said.

By speaking the language of government in addition to telling their own authentic stories these survivors became an unstoppable force.

Key players:
As intentional as surviving families were, they needed an advocate, someone to champion their cause. While there were many supporters, Senator Doug Jones, D-Ala. made passing this legislation a main priority. According to Jones, including the repeal of the offset in the 2020 National Defense Authorization Act (NDAA) demonstrates “our commitment to our veterans, our military service members and their families because they are the ones making the sacrifices for us. We have got to do more than just give this lip service and talk about the support for our military and throw money at modernizing our military. This is for families. This is for human beings.”

Jones emphasized the need for consistency and maintaining momentum. Because of the lack of understanding and high price tag associated with this legislation, “it wasn’t something that you could just file and make a speech on. You had to constantly work at it. That is what we did and it made a big difference,” Jones said.

His personal investment in the cause was evident as he emotionally recalled hearing from a widow in an Alabama press conference who said, “‘now my husband can finally rest in peace knowing that his commitment to me has been fulfilled.’ That was incredibly gratifying,” Jones says.

Advocacy groups:
Another resource that made 2019 more successful than the previous two decades was the unified message presented by a coalition of military service organizations, including Tragedy Assistance Program for Survivors (TAPS), VFW, National Military Family Association, Gold Star Wives of America, MOAA and others. Because of the groups’ familiarity with government along with connections to elected officials, they provided guidance and leadership to the widows-turned-activists.

“The most significant thing this year was the grassroots advocacy effort from the impacted spouses themselves. It was stellar. That is really what has been missing in the past,” Candace Wheeler, policy director for TAPS, said.

Alongside military survivors and political leaders, these organization emphasized that this was not a partisan issue. It was not even a bipartisan issue. It was a nonpartisan issue that needed to be corrected.

What’s next:
There is still work that still needs to be done. Defense Finance and Accounting Services (DFAS) will now begin to calculate what is owed to these families, an undertaking that will likely require a significant amount of work and time. There will be a phase-in process to receive this SBP benefit starting in 2021. DIC benefits will remain the same. Details:
January 1, 2021: ⅓ of owed SBP, SSIA
January 1, 2022: ⅔ of owed SBP, SSIA
January 1, 2023: full benefits, child-only option phased out & those whose children “aged out” can start to receive benefits

QUESTIONS?
Updates to the SBP-DIC Offset can be found on online or contact TAPS at policy@taps.org.

Don’t forget the ‘kiddie tax’:
Whenever there is “bad” legislation, like the offset, there are workarounds. In this case, many spouses with dependents chose to transfer SBP payments to their children to avoid the offset reduction. However, the 2017 Trump tax law moved these surviving children into a higher tax bracket, in the same category with wealthy trust-fund kids, costing survivors thousands more in taxes each year. This penalty is called the “kiddie tax.” This oversight has also been corrected with the inclusion of the Rep. Elaine Luria’s (D-Va.) Gold Star Family Tax Relief Act in another appropriations bill.  Affected families are now eligible to amend last year’s tax returns.

90,000 Sailors Owe John Rossie the World's Biggest "THANK YOU!"

For years John Rossie of Colorado Springs was the principal fighter for Agent Orange benefits he felt due Navy veterans of the Vietnam War...the Blue Water Navy.
On January 1, under pressure from Congress and veterans' organizations, VA will finally begin honoring Agent Orange exposure claims from the approximately 90,000 former sailers, providing they evidence one of the recognized Agent Orange illnesses.
I did the work for our C-123 veterans, but we number only around 2,100. John's work has a potential to impact 90,000 veterans...truly a staggering victory. John had to pursue his distant victory for four more years after we won ours.
Congratulations!
John and the sailors he served in his years-long mission give me the thought, "shipmates forever," though most will have never met John. That's dedication! Every veteran he has served so doggedly must thank him for never giving up, for years of brilliant ideas, crafty schemes and down-right unflinching target-oriented hard work. Not for himself, but for shipmates, their families and survivors.
God Bless.
    Wes Carter, Major, USAF Retired
    Chairman, The C-123 Veterans Association

VA extends Agent Orange benefits to Blue Water Navy Vietnam Vets January 1, 2020

Law also affects survivors of Veterans, certain dependents and Veteran homebuyers 

WASHINGTON – The U.S. Department of Veterans Affairs (VA) begins deciding Blue Water Navy Vietnam Veterans Act of 2019 claims, Jan. 1, 2020, extending the presumption of herbicide exposure that include toxins such as Agent Orange, to Veterans who served in the offshore waters of the Republic of Vietnam during the Vietnam War.

Prior to the measure, only Vietnam War Veterans who served on the ground in Vietnam or within Vietnam’s inland waterways were eligible to receive disability compensation and other benefits based on a presumption of herbicide exposure. (CORRECTION: certain post-Vietnam War C-123 veterans are also entitled to a presumption of exposure to Agent Orange.)

Signed into law June 25, the law specifically affects Blue Water Navy (BWN) Veterans who served as far as 12 nautical miles offshore of the Republic of Vietnam between Jan. 6, 1962 and May 7, 1975, as well as Veterans who served in the Korean Demilitarized Zone (DMZ) between Jan. 1, 1967 and Aug. 31, 1971. These Veterans can apply for disability compensation and other benefits if they have since developed one of 14 conditions that are presumed to be related to exposure to herbicides such as Agent Orange. Veterans do not need to prove that they were exposed to herbicides. The specific conditions can be found by searching Agent Orange on www.va.gov.

“For six months, VA worked diligently to gather and digitize records from the Naval History and Heritage Command in order to support faster claims decisions,” said VA Secretary Robert Wilkie. “These efforts will positively impact the claims process for Veterans filing for these benefits.”

Qualifying recipients, in addition to affected Veterans still living, are certain survivors of deceased BWN and Korean DMZ Veterans.

Survivors can file claims for benefits based on the Veteran’s service if the Veteran died from at least one of the 14 presumptive conditions associated with Agent Orange. The law also provides benefits for children born with spina bifida if their parent is or was a Veteran with certain verified service in Thailand during a specific period. The Blue Water Navy Act also includes provisions affecting the VA Home Loan Program. The law creates more access for Veterans to obtain no-down payment home loans, regardless of loan amount, and the home loan funding fee is reduced for eligible Reservists and National Guard borrowers who use their home loan benefits for the first time. Certain Purple Heart recipients do not pay a funding fee at all. VA’s website describes these and other benefits. 

Veterans who want to file an initial claim for an herbicide-related disability can use VA Form 21-526EZ, Application for Disability Compensation and Related Compensation Benefits or work with a VA-recognized Veterans Service Organization to assist with the application process. Veterans may also contact their state Veterans Affairs Office.

BWN Veterans who previously filed a claim seeking service connection for one of the 14 presumptive conditions that was denied by VA may provide or identify any new and relevant information regarding their claim when reapplying. To re-apply, Veterans may use VA Form 20-0995, Decision Review Request: Supplemental Claim. As a result of the new law, VA will automatically review claims that are currently in the VA review process or under appeal.  

For more information about the Blue Water Navy Act and the changes that will take effect visit https://www.benefits.va.gov/benefits/blue-water-navy.asp.