VA UPDATES: April 9th, 2005

H.R.1366 (Rep. Bilirakis, R-FL) would expand CRSC to those who were medically retired with less than 20 years of service. The same CRSC rules would then apply for all Chapter 61 retirees regardless of years of service. The proposed effective date of the legislation is 1 JAN 06.

CRSC UPDATE 28: Concurrent receipt champion Rep. Mike Bilirakis (R-FL) has introduced a new initiative (H.R. 1366) to help address a long-standing inequity affecting disabled members who were forced to retire from service before serving 20 years because of combat- or operations-related conditions (i.e. Chapter 61 retirees). Currently, only members who served long enough to retire independent of any disability are eligible for Combat-Related Special Compensation (CRSC). Presently, those who were medically retired short of 20 years have to forfeit $1 of military retired pay for each $1 they receive in VA disability compensation.  This legislation would ensure combat-wounded members receive the retired pay they earned by service. It would exempt from the VA offset an amount of retired pay equal to 2.5% of their highest 3-year average basic pay times years of service. For example, it would provide a member who is disability retired for combat wounds with 15 years of service at least 37.5% of high-3 average basic pay from the Defense Department in addition to his or her VA disability compensation. This legislation is important to help address a current inequity whereby a member with 20 years of service and a 10% combat-related disability from the VA doesn't have VA compensation for that disability deducted from retired pay, but a member who is 100% disabled from combat wounds and medically retired at 19 years and 6 months suffers the full VA offset.

[Source: MOAA Leg Up 18 MAR 05]

VA BUDGET 2006 UPDATE 03:  The Bush administration has maneuvered new support in their effort to reduce the government's veteran expense.  In January, Republican leaders removed Rep. Christopher Smith (R-N.J.) as committee chairman for being too close to veterans groups, too supportive of expanding benefits and too dismissive of Bush administration plans to slow VA spending and impose fees on low-priority veterans. His replacement Rep. Steve Buyer (R-IN) says the medical and rehabilitation needs of a new generation of war veterans leave him more certain than ever that Congress erred in 1996 when it opened VA healthcare to any veteran willing to pay modest fees.  A decade ago, in the wake of a Persian Gulf War that saw relatively few U.S. casualties, the VA went back to worrying about an aging patient population and under-used VA clinics and hospitals. Those concerns, along with wishful thinking about the VA billing employer-provided insurance plans for the cost of care, led Congress to open VA facilities to veterans neither poor nor disabled.  Time has shown that to be a mistake. Today the VA has $3 billion in uncollected debt for healthcare rendered which insurance companies have not paid.  With oversight responsibility now for the second largest department in government, Buyer said he has three short-term priorities:

-- Re-focus VA healthcare on its "core constituency" of service-disabled, indigent and special-needs veterans.

-- Develop a "seamless transition" process for veterans moving from active duty to VA care. So far more than 10,000 have been wound in Iraq and Afghanistan and as many as 100,000 could have Post-Traumatic Stress Disorder, Buyer said. "The VA needs to prepare to receive them."

-- Improve VA rehabilitation and vocational training to ensure that even the most severely injured veterans return to rewarding lives.

To meet these priorities:

--He expects a new bipartisan Veterans' Disability Benefits Commission to review whether Congress went too far on allowing concurrent receipt of military retirement and VA disability payments. Buyer said that as chairman of the House subcommittee on military personnel a few years ago, he found $25 million to lift the concurrent receipt ban only for 100%, combat-disabled retirees. Little did he realize that his care and concern would be so enveloped by politics and the ban quickly lifted to benefit a few hundred thousands retirees, many having no combat-related disability.

-- He expects the commission to consider whether to change the way disability ratings are set or to tighten the definition of "service-connected" injuries or ailments. There is something bothersome in the system where you can have a soldier blow out his knee from a roadside bomb and end up with a disability that's the same as a guy who blew out his knee sliding into home plate at church league softball on Sunday.  He questions whether that type of disability system t is just and fair.

-- He would not assure current veterans with disability ratings that they will be excluded from commission recommendations and believes everything should be on the table.

-- He wants considered offering lump-sum payments to veterans with disabilities rated 20% or less, as settlement of all future compensation claims. He feels part of the problem is there's gamesmanship in the system whereby veterans consistently, over their lifetimes, keep re-applying for their ratings, trying to get bumped up higher and higher.

-- He feels veterans' organizations that claim that all veterans earned the right to VA healthcare, and use what he sees as inflammatory rhetoric to knock proposals to raise fees on non-poor, non-disabled veterans, are abandoning values like duty and sacrifice under which veterans served

[Source:  Military Update Tom Phillpott’s

article 10 MAR 05 www.fra.org/mil-up]

VA BUDGET 2006 UPDATE 04: On 7 FEB 05 President Bush's administration released its budget request for fiscal year 2006, which would add just $101 million more for VHA than last year's appropriation. The amount would be an increase of less than half of one percent; far below the 12 to 14% the VA itself testified is necessary to offset inflation and the rising cost of health care. Because the proposed increase is so small and comes at a time of rapidly rising costs, the budget includes a number of maneuvers to alleviate the impact by placing some of the financial burden on veterans. For the third year in a row, the Bush budget proposal included a plan to implement a $250 user fee for Category 7 and 8 veterans and to increase prescription co-payments from $7 to $15.

This year's proposal also requires VA to identify and implement an additional $590 million worth of management efficiencies. In plain language, implementing management efficiencies means VA must maintain the same level of productivity with half a billion fewer dollars.  User fees and co-payments are nothing more than an attempt to make veterans pay for health care they have already earned. Every time such cost-transferal proposals have been made, the veterans' organizations have voiced complete opposition. In response to these objections, both the Senate and the House of Representatives have always rejected the President's proposals. However, the setting has changed with new House and Senate Veterans Affairs committee chairmen Rep. Steve Buyer (R-IN). He has already stated his support to focus resources on fewer veterans.  A medical system that only treats the sickest of the sick and the poorest of the poor is not sustainable and would be undesirable. In the end, it would seriously erode the quality of care for today's and tomorrow's veterans.  The Bush proposal portends other dismal changes. VA indicates that it will call for a staff reduction of 3,712 employees in medical care. Federal funding for state-run veteran homes that provide long-term care will be eliminated, and reduced budgets for VA-run nursing homes will require the elimination of approximately 5,000 beds. Although the budget plan would not push out any veterans currently residing in nursing homes, VA officials said that the cut to long-term care reflects an 18% increase in "non-institutional" care funding because veterans increasingly are choosing home care.  DAV and other organizations encourage every member, and anyone concerned about the reduction of veterans' benefits, especially during a time of war, to contact their elected officials and express outrage that the men and women who have fought for our country cannot know with certainty that a reliable VA health care system will be available in the future to obtain benefits and health care. 

   The House and Senate each moved one step closer towards finalizing the 2006 fiscal year Budget Resolution when they approved their separate versions of the budget. Negotiators from the House and Senate must now come together to work on one final version of the bill. The House bill, which was approved on a 218-214 vote, still falls short of veteran organization's goal of a $3.4 billion increase in veterans' health care. However, it does not include either the proposed $250 yearly enrollment fee or the increased prescription drug co-payment.  The Senate version passed by a narrow 51-49 vote and also rejects the prescription drug increase and the enrollment fee. It increases spending for veterans health care by $1.2 billion over last year's funding level, thanks to an amendment by Senators John Ensign and Larry Craig which increased funding. Four Senators voted against that amendment.  To see the vote on the Senate's amendment and bill refer to: http://tinyurl.com/6la3j. At http://clerk.house.gov/evs/2005/roll088.xml can be seen the House bill vote. The next step for the budget is a conference committee. Members of the House and Senate will come together over the next several weeks to iron out the differences between the two versions, before settling on a single version, which must then be approved, once again, by both the House and Senate.

[Source: DAV Legislative Bulletin FEB 05

& VFW Washington Weekly 18 MAR 05]

VETERAN'S TAXABLE PAY: When filing your federal income tax you can use the following guidelines to determine what income to report:

. All VA benefits are exempt from taxation and should not be reported to the IRS.  This includes the VA Work Study Program.  Moneys paid to participants in the Work Study Program are educational assistance benefits paid under the same Chapter under which the student is receiving educational assistance.

. VA does not issue W-2 or 1099 forms, with one exception: amounts of overpayments that are waived by VA are taxable income, and are reported as such to the IRS (1099 form issued).

. Secondary interest on VA benefits may be taxable.  For example, if a VA beneficiary deposits his or her compensation check in an interest bearing account, the interest is not tax exempt.

. VA benefits are subject to collection for tax liens, i.e. in cases where the beneficiary owes the IRS.

. Military Retired Pay:  Veterans in receipt of military retired pay who are awarded VA compensation benefits retroactively may claim an exclusion for their income in the amount of the VA compensation they would have received had they not been in receipt of military retired pay.  Affected veterans should claim the exclusion by submitting the award letter showing the amount and effective date of compensation they would have received but for the receipt of military retired pay.  IRS instructions tell affected veterans to submit a "VA Form 20-8993."  VA Form 20-8993 is the award letter.  If the veteran doesn't have it, VA can provide a letter in lieu of it.           

[Source: eFloridaVets News dtd 25 FEB 05]

3/3 RVN Ass’n  Vol  1  Issue 5    01/01/2006