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House Democratic leaders unveiled a plan late Thursday to provide a temporary increase in retired pay for about 30,000 people whose military careers were cut short by severe service-connected disabilities.
For 22 months — from Jan. 1, 2011, until Sept. 30, 2012 — people with fewer than 20 years of service who are receiving military disability retired pay for service-connected disabilities rated by the Veterans Affairs Department at 100 percent would be allowed to receive full veterans' disability and military retired pay.
Also eligible would be people who are formally rated as 90 percent disabled but are considered fully disabled because their injuries prevent them from holding a job.
For nine months — from Jan. 1, 2012, until Sept. 30, 2012 — the right to receive full veterans disability compensation and military disability retired pay would be extended to those with fewer than 20 years of service who have disabilities rated at 70 percent or greater.
On Oct. 1, 2012, payments would cease to these so-called Chapter 61 retirees, named for the section of law that covers military disability retirement.
Chapter 61 retirees with more than 20 years of service who are covered by existing law regarding concurrent receipt of military and benefits would not be affected by the change.
How much additional money would be received would depend on several factors, including an individual's rank and years of service when medically retired and how much the Veterans Affairs Department is paying that person in disability, said Michael Hayden of the Military Officers Association of America.
For example, a medically retired E-7 with 16 years of service with a disability rated at 100 percent would see about $1,500 more a month. A 100 percent disabled O-4 with 16 years of service who is receiving disability retired pay would see about $2,700 more, Hayden said.
The additional payments would be provided through Concurrent Retirement and Disability Payments, one of the Pentagon's two concurrent receipt programs. CRDP is already provided to many other disabled retirees but is not available to Chapter 61 military disability retirees with fewer than 20 years of service.
About 12,000 of the military disability retirees would be covered by the Jan. 1, 2011, change and another 20,000 by the Jan. 1, 2012 change.
The temporary benefits are included in HR 4213, the American Jobs and Closing Tax Loopholes Act of 2010, which Congress will try to pass before its Memorial Day recess. Concurrent receipt of retiree and veterans benefits is one of several "sweeteners" added to the bill in an effort to get enough votes for passage, but it is still unclear if there will be enough support.
One of the big issues facing the measure is that it contains more than $100 billion in spending, offset by only about $44 billion in government cost reductions through changes in tax law. That makes a vote for the bill difficult for lawmakers opposed to deficit spending.
Total cost of the Chapter 61 concurrent receipt provisions are estimated at $686 million.
The decision to add military disability retirement benefits to the tax extender bill comes after the House Armed Services Committee was unable to include an Obama administration request to help Chapter 61 retirees in the $760 billion defense authorization bill that the committee passed on Wednesday because of budget limitations.
The White House proposal, submitted to Congress in February, called for a permanent change in law that would have completely phased out over five years the offset in military retired pay required of those who also receive veterans' disability pay. In addition to Chapter 61 retirees, other retirees with service-connected disabilities that are low-rated and not considered the result of combat or combat-related training also are still subject to the offset.
Rick Jones of the National Association for Uniformed Services said the proposal for temporary benefits falls far short of that the Obama administration promised, but added, "We welcome forward movement."
Still, he said, some severely disabled veterans who will be helped by temporary benefits "are not going to feel very comfortable about the situation because of the expiration date on the provision," Jones said.
Jones said he would also like the concurrent receipt provisions to be attached to a less controversial bill.
"It is, of course, progress, and incremental progress is what we are looking for," said MOAA's Hayden.