Effort to Axe the Military “Widow’s Tax” Continues to Grow With Bipartisan Support

April 26, 2019 by Sean Trambley

Two months after being introduced by a coalition led by Senators Doug Jones, D-Ala., Susan Collins, R-Maine, Jon Tester, D-Mont., and Mike Crapo, R-Idaho, bipartisan and bicameral support for the Military Widow’s Tax Elimination Act of 2019 continues to grow.

The bill, now supported by 57 Senators with Senators Jeanne Shaheen, D-N.H., and Maggie Hassan, D-N.H., signing on this week, would end the so-called “Widow’s Tax” by repealing the unfair law that prevents as many as 65,000 surviving military spouses nationwide from receiving their full Department of Defense and Veterans Affairs survivor benefits.

Currently, military widows and widowers who qualify for the VA’s Dependency and Indemnity Compensation (DIC) are forced to take prorated annuities from the Survivors Benefits Plan (SBP), even though they elected to pay into the program.

The legislation reflects the widely held belief that those who give their lives for their country deserve fair compensation for their surviving spouses and, at the very least, should be paid what they are owed from the investment they made in the SBP.  

In previous sessions of Congress, the legislation has also earned wide bipartisan support as well as support from key veterans advocacy groups, including the Gold Star Wives of America, Inc., Military Officers Association of America, National Military Family Association, Tragedy Assistance Program for Survivors, Veterans of Foreign Wars and more.

Under current law, the surviving spouse of a retired member who dies of a service-connected cause, or a service member killed on active duty, is entitled to dependency and indemnity compensation from the VA.

If the military retiree was also enrolled in the survivors benefits plan, the surviving spouse’s benefits are reduced by the amount of dependency and indemnity compensation payment, currently $1,319 per month.

This leaves many widows and widowers with as little as $2,200 of the $3,525 per month they had expected to receive to support their families after their loved one’s passing.

Each case varies depending on rank and the year of service-related death, but the average dependency and indemnity compensation offset to survivors benefits plan pay is $925 per month. The Military Widow’s Tax Elimination Act would repeal this required offset and authorize payment of both forms of compensation in the case of a service-connected death.

“It is absolutely unacceptable that our federal government refuses to pay the widows and widowers of our nation’s heroes the full benefits they are entitled to, especially those benefit plans for which they have voluntarily paid into,” said Senator Jones, a member of the Senate Armed Services Committee.

“No surviving spouse should be faced with this unexpected and completely unfair cut to the benefits they count on in these tragic circumstances. This is a tax on military families who have already sacrificed so much. We are going to work to right this wrong,” he added.

“We have a duty to not only support the brave men and women of our military, but also their families,” said Senator Susan Collins. “Military spouses make countless sacrifices while their loved ones are serving our nation in uniform, and they should not endure financial hardship due to a provision that unfairly curtails the survivor benefits their families purchased.”

Companion legislation in the House was introduced in January by Representatives Joe Wilson, R-S.C., and John Yarmouth, D-Ky., and now has 241 cosponsors.

“Members of our military risk their lives for our freedoms every day. It is unconscionable to think there is a ‘Widow’s Tax’ on the surviving family members of our courageous men and women. We owe it to them to secure stable benefits in the event of their retirement or death,” Representative Wilson said. “For too long, the survivors benefit plan reduction by the amount of paid dependency and indemnity compensation has been an unfair penalty that cuts earned benefits to military survivors. This issue creates a substantial burden for the surviving families, and we must act now.”

“This legislation corrects a terrible wrong and makes clear that we support members of our military not just when we need them, but when their families need us,” said Representative Yarmuth.​

Text of the Senate legislation can be found here and House legislation here.

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