Disabled Veterans Tax Termination Act
The Disabled Veterans Tax Termination Act would expand and permanently codify concurrent receipt of military retired pay and U.S. Department of Veterans Affairs (VA) disability compensation. Specifically, it would allow retirees with service-connected disabilities rated under 50% to receive both payments at the same time (concurrent receipt) and would extend concurrent receipt to disability retirees who left active duty under Chapter 61 (disability retirement) with fewer than 20 years of service. The bill tightens how the retirement pay offset against VA disability payments is calculated for those under 20 years of service, but ultimately removes the phase-in period and makes concurrent receipt permanent. The changes would take effect on the first day of the first month after enactment and apply to payments beginning in that period onward.
Key Points
- 1Expands eligibility for concurrent receipt to include service-connected disabilities rated less than 50% (not just higher ratings).
- 2Extends concurrent receipt to disability retirees under Chapter 61 with fewer than 20 years of creditable service, with a specific offset formula that can limit how much retired pay is reduced.
- 3Modifies the current concurrent receipt framework (Section 1414) to reflect the end of any phased-in approach, making concurrent receipt permanent.
- 4Reorganizes and renames the relevant section (Section 1414) and updates cross-referenced provisions to reflect permanent concurrent receipt.
- 5Provides that the changes apply to payments for months beginning after enactment (effective date tied to the date of enactment).