Old law costs
isle vets millionsAbercrombie targets an
1891 statute that he says
shortchanges disabled veterans
A congressional report estimates that 4,146 Hawaii veterans are losing $21.6 million in military retirement benefits a year because they also are eligible for disability payments.
That results from what some see as a conflict between the military's retirement pension and its disability compensation benefits.
Under federal law, veterans with 20 years of service are entitled to retirement benefits equal to 50 percent of their final basic pay. Veterans who were injured or incurred a disability while in uniform also are entitled to receive compensation benefits from the Department of Veterans Affairs.
However, under an 1891 federal law, a veteran with 20 years of military service has his retiree pension reduced by what he receives in disability payments.
To support legislation abolishing this practice, U.S. Rep. Neil Abercrombie asked the Democratic staff of the House Committee on Government Reform to examine the effects of the so-called "disability veterans tax" on Hawaii's veteran population.
The report says that there are 14,709 veterans in Hawaii who receive military benefits, and 28 percent of them, or 4,146, are affected by the law.
The report estimates that in Abercrombie's 1st Congressional District, which covers most of urban Honolulu, 2,196 veterans lose about $11.4 million in benefits annually.
"These folks devoted the prime of their lives to defend our country," Abercrombie said. "Now they're getting slapped with the disabled veterans tax. It's totally unfair, and I'm going to keep fighting until we fix the situation."
Both the House and Senate passed legislation last year to end the restrictions on receiving both military retiree and VA disability benefits. However, under a veto threat by President Bush, the measure was removed from the final version of the Department of Defense's authorization bill.
Instead, Congress enacted a bill that would allow veterans who received a Purple Heart or had a disability rating of 60 percent or more caused by an armed conflict, hazardous service or war training activities to be exempt from the 1891 law.
However, the report says the law was so narrowly written that it will affect only 33,000 of the 560,000 veterans who qualify for both retirement and disability benefits. The new law also is so complicated that "it may take years for retirees to prove their entitlement to special pay," the report says.
Abercrombie said Republican leaders have not allowed a vote on a new bill he co-sponsored with 351 members of the House that would allow concurrent receipt of full retirement pay and disability benefits.
Earlier this month, the White House proposed a bill that would have given future benefits or an increase in current disability only to those veterans with injuries or illness linked directly to service. The bill was dropped after severe criticism from a veterans group.
The proposal would be phased in over five years. In the first year, 2004, all retirees with 20 or more years of service would see some retirement pay restored: $20 a month for retirees rated 10 percent disabled, up to $750 a month for 100 percent disability.
