Year ends with pay and benefit gains

A lame-duck and bitterly divided Congress found comity enough in mid-November to pass three bills that will raise veterans’ benefits, improve pay for VA doctors and strengthen veterans’ legal rights.

The bills cap another year of solid pay and benefit gains for a military community that lawmakers recognize is under enormous strain.

Besides passing the veterans bills, detailed below, a worried Congress in 2004 began to reverse some of the post-Cold War drawdown, voting to raise active Army forces by 20,000 and Marines by 3000. Top pay initiatives this year include a 3.5 percent raise and the last of a series of above-average increases in Basic Allowance for Housing, both to occur in January.

With 182,000 Reserve and Guard members still mobilized, and many serving year-long combat tours, Congress is anxious to improve benefits and avoid a recruiting and retention crisis. But lawmakers also began to heed Bush administration warnings about cost and to link new benefits to continued service.

Reservists, for example, will see better education benefits but only if they were mobilized for at least 90 days. By next May, drilling reservists will be able to buy TRICARE Standard coverage at a reasonable rate. But the offer is open only to those who were mobilized. They are entitled to a year’s coverage for every 90 days of activated service.

Military retirees and survivors scored a huge victory when Congress voted to phase out by April 2008 a sharp drop in Survivor Benefit Plan payments that occurs at age 62. All current and future participants stand to gain but the first group to see higher payments, by next October, will be 270,000 SBP recipients already 62 or older.

The other big winners from the 2004 legislation year are 15,000 retirees with 20 or more years of service and disability ratings of 100 percent. On Jan. 1, they will see their military retired pay fully restored. Congress voted to accelerate for this group planned 10-year phase out of the ban on “concurrent receipt’’ of both military retirement and disability pay.

Tops among the three new veterans bills passed and sent to the White House for signature is the Veterans Benefits Improvement Act (S 2486).

This bill will:

n Open the active duty Montgomery GI Bill to drilling reservists if they complete two consecutive years of active duty service. They will have a year after deactivation to pay the required $1,200 “buy-in’’ contribution.

n Increase by $100 a month GI Bill payments for apprenticeship or on-the-job training. Effective next October, these benefits will be $853 a month for the first six months of training, $653 a month for the second six months and $452 for subsequent months. GI Bill coverage will be expanded to include competency-based apprenticeships as well as time-based.

n Increase to $333,700 the maximum home loan amount allowed under the VA loan guaranty program. The VA currently guarantees 25 percent of a qualified home loan of up to $240,000. The higher ceiling is the same used by the Freddie Mac home loan program and like the Freddie Mac the VA amount will be adjusted to keep pace with inflation.

n Provide an additional $250 a month in Dependency and Indemnity compensation, for two years, to surviving spouses who have children under age 18. DIC is paid when a service member dies on active duty or a veteran dies from a service-connected disability.

n Require the VA to exclude life insurance payments from “income’’ when determining veterans death pension benefits.

The VA Health Care Personnel Enhancement Act (S 2484) will increase pay to VA physician and dentists and allow more flexible work schedules for its nurses. Doctors will move to a new three-tier system of basic pay, market pay and performance pay. Annual basic pay will run from $90,000 to $132,000. Additional “market pay’’ will be set based on VA needs and the healthcare labor market.

Performance pay will be tied to specific goals. It could not exceed $15,000 or 7.5 percent of combined basic pay and market pay.

The same bill would allow the VA to pay nurses who work three 12-hour shifts as though they worked 40 hours; allow nurses to work full-time for nine months, take off three months and be paid 75 percent of full-time pay throughout the year; allow the VA to offer $10,000 to $25,000 in annual special pay to nurse executives.

Finally, the Veterans Health Programs Improvement Act (HR 3936), among other things, would end patient co-payments for VA-provided hospice care, require VA to establish its first multi-trauma centers to study new treatments for the most severe type of war wounds, and increase assistance to homeless veterans by $24 million a year, or about one third.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at:

[email protected]