As I See It - Offsets Crumbling Under Scrutiny - By Col. Steve Strobridge

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From MOAA

As I See It - Offsets Crumbling Under Scrutiny

By Col. Steve Strobridge, USAF-Ret. - January 2008

For most of the century, the military compensation system has been riddled
with a confusing maze of offsets (i.e., benefit deductions) intended to
constrain compensation payments and limit government costs.

More than a decade of intensive education efforts by MOAA and The Military
Coalition, along with the graphic examples of inequities facing veterans and
survivors of current and past conflicts, have convinced Congress that many
of the offsets are unfair, as indicated by the following list of victories:

1999: repealed retired pay penalty for officers working as federal
civilians;
1999: won the first easing of the disability offset to retired pay for
severely disabled retirees;
2001-03: expanded full concurrent receipt to all combat-disabled service
members with 20 or more years of service and won a 10-year phase-out of the
disability offset for others with 20-plus years;
2004: won a four-year phase-out of the Survivor Benefit Plan (SBP) annuity
reduction imposed on survivors age 62 and older (intended as an offset to
Social Security);
2004: won full, immediate concurrent receipt for 100-percent disabled
service members with 20-plus years; and
2005: accelerated the effective date of full concurrent receipt for
unemployables.

And those changes proved only a start, as the tide of philosophical change
has generated more and more cracks in the logic behind the offsets. In 2007,
there have been several new developments of major significance:

* The Dole-Shalala wounded warrior task force recommended (and the
Bush administration endorsed) repeal of the deduction of military disability
separation pay from VA disability compensation.
* The Veterans Disability Benefits Commission recommended elimination
of any deduction of service-earned retired pay from VA disability
compensation and elimination of the deduction of VA Dependency and Indemnity
compensation from survivors' SBP annuities if the death was caused by
service.
* The new FY 2008 Defense Authorization Act authorizes full concurrent
receipt for all combat-disabled service members forced into medical
retirement before 20 years of service, full concurrent receipt for
unemployables, and at least some modest payment to SBP-DIC survivors in
recognition of the inequity of the offset.

Unfortunately, most of these improvements were won despite strong objections
from DoD and whichever (Clinton or Bush) administration was in place at the
time (the notable exception being the Dole-Shalala recommendation on
military disability separation pay, which the current administration has
endorsed).

The past years of progress, along with the dramatic developments in 2007,
show that "it's always been that way" arguments are losing their
credibility. Now, we're winning more focus on what the payments actually are
for and whether offsets serve that purpose.

Congress has recognized that the disability offset to retired pay and the
DIC offset to SBP are wrong, and we're now only talking about finding the
money to fix those inequities.

The next logical move is to examine the various separation pays that are
subject to offset by VA disability compensation and reserve retired pay.

Current law, in effect, treats separation pays as advances on retired pay.
MOAA disagrees with that. We think a main purpose of separation pay is to
help service members offset the expense of transition to post-military life,
and amounts paid for that purpose shouldn't be subject to later recoupment
from reserve retired pay or VA compensation.

Our past progress on the disability and survivor offsets gives us hope for
the future on easing separation pay inequities, too.

Col. Steve Strobridge, USAF-Ret.,

director of MOAA government relations

Hal Cleveland, U.S. Navy, (Ret.)