Readers of Tom Philpott's Military Update column sound off.

Separation Pay Recouped Before Disability Pay Begins

Recently I filed for disability benefits after 24 years of combined Army active duty service and National Guard duty. I had separated from the Army in February 2003 and received separation pay. I was in the Guard until judged disabled and retired out.  Now I am being told I have to pay $30,000 back to the government to get my disability payments.

I am rated at 50 percent disabled and awaiting final ratings for the other conditions being evaluated. With my impairment it is next to impossible to get gainful employment. Why do I have to pay money to the government that I received in 2003 to get the disability payments my family and I need to survive on? Why wasn't it made clear that this could happen in out processing meetings on base before I separated?  Why would they tell me I could be in the Guard if I was deemed fit for duty then later told I needed to retire due to sleep apnea?

I had been shaking Humvees in my sleep for years due to snoring and was exposed to chemicals in the Gulf War. No one said a thing. Now they think I have $30,000 lying around and expect us to survive while they reclaim what they say I owe.

I would appreciate some clarification.

ELIAS D. TORRES

 

You are feeling the effect of a concurrent receipt law that bans a veteran from receiving separation pay and VA disability compensation for the same period of service.

Under Title 10 U.S. Code, Section 1174(h)(2), a member who has received separation pay cannot be deprived, by receipt of such pay, from eligibility for VA disability compensation for conditions related to that time in service.  However, an amount equal to separation pay, less any federal income tax paid or withheld, must be recouped before VA compensation begins.  It typically means VA compensation is withheld until the government recoups an amount equal to net separation pay. This is to avoid what the law considers double compensation for the same service.

So while you won't be required to return the $30,000, less federal income tax, your VA compensation won't start until net separation pay is fully recouped.

Recoupment of separation pay also is required for members who leave active service, enter a reserve component and later become eligible for reserve retirement.  Reserve retirement at age 60 is withheld until any separation pay is recouped.

Service members who receive separation pay should be briefed more thoroughly on these effects.  – Tom Philpott

TSP Day Traders

Your article on military investors and the federal Thrift Savings Plan confirmed my theory about day traders and manipulation of the stock market.  Drive it high, let any knee-jerk situation cause a panic, sell a mass of stocks, cause the market to fall.  Someone puts out a good word, stops the fall, day traders buy in.  And up and down the market goes.

Thanks to Gregory T. Long, executive director of the TSP program, for saving TSP investors from some of this.

I sent an email to my senator asking that she read your article. You do a great service for veterans and families of veterans. Keep up the good work.

R. KIDD
Via e-mail

SBP Open Season

I retired from the Air Force in 1977 but did not enroll in the military Survivor Benefit Plan. I was divorced in 1979 and remarried in 1995.

The other day I visited the personnel office at Patrick Air Force Base, Fla., and asked about enrolling in SBP now that I'm remarried. I was told I would have to wait until an "open season."

When would you guess there will be another SBP open season? The gentleman I talked with indicated the last one was around 2005, and "that it will probably be at least a couple of years before another."

Michael D.
Via e-mail
 

Congress allowed the last open season, from October 2005 through September 2006, only because it had made a major improvement to SBP by phasing out a reduction in payments that had occurred for beneficiaries at age 62, the so-called Social Security offset.  SBP open seasons almost always have been tied to some change to the program.  I don't see another change on the horizon.  It could be a lot of years before another SBP open season.  During the last open season, retirees who wanted to enroll were required to pay all missed premiums since retirement plus interest.  Relatively few retirees elected to enroll. – T. P.

SSIA Eligibility

My husband passed away in July 2003. He had been 100-percent disabled and unemployable since 1990.

He had paid into the Survivor Benefit Plan since it became available after he retired in 1974.  But I also was eligible for Dependency and Indemnity Compensation from the VA and that payment was greater than my SBP would have been. So, at the time of his death, I received a lump sum settlement of past SBP premiums.

Now that the Special Survivor Indemnity Allowance has been approved for payment effective Oct. 1, 2008, will we widows who received the SBP "lump sum" be eligible.

By the way, as I researched the SBP change, I discovered I have been eligible for an additional allowance the past five years because my husband had been 100 percent disabled for more than eight years before his death.  I contacted the VA to apply for that allowance and have been advised that it was approved retroactive to 2003. For this I am very pleased.

CLAUDETTE D.

Yes, you are eligible for the SSIA.  It is intended to be partial compensation for the dollar-for-dollar offset in SBP that you and other surviving spouses see when you become eligible for DIC.

SSIA will begin automatically for most eligible survivors with first payments arriving in early November.  The Defense Finance and Accounting Service sent letters to all known surviving spouses who qualify.  Those who haven't received a letter and believe they qualify can check on their account and address information by contacting DFAS at 1-800-321-1080. – T.P. 

Letters may be edited for clarity or length.  Write to Military Forum, P.O. Box 231111, Centreville, VA  20120-1111, send e-mail to militaryforum@aol.com or visit www.militaryupdate.com.