Lawmakers are taking aim at the controversial ‘widow’s tax’ on Gold Star family benefits
With momentum growing in Congress to repeal a new tax hike on the families of some deceased service members, military advocates hope this will be the year another surviving military spouse pay issue — the so-called “widow’s tax” — ends.
Spouses of service members who die on active duty or whose military member died of a service-connected illness or injury in retirement often receive monthly payments from both the Defense Department and the Department of Veterans Affairs.
By law, the payments — Survivor Benefit Plan annuities from the DoD and Dependency and Indemnity Compensation, or DIC, from the VA — are reduced for those who receive both, with SBP payments reduced dollar for dollar by the amount received from the VA. The reduction is known as the SBP-DIC offset.
Spouses and military family advocates say SBP, which is elective coverage paid by the service member, is similar to an insurance annuity and should be paid out regardless of additional income. They say the offset should be abolished, as it is unfair to widows or widowers whose spouses received military pay or retirement and disability compensation.
When a service member dies on active duty or in retirement with a disability rating of 100%, or from a service-connected injury or illness, the surviving spouse receives DIC, currently $1,319.04 each month, with additional payments for any children.
If their military member purchased SBP, they may also receive SBP payments equaling 55% of their service member’s retirement pay.
More than 66,000 surviving spouses are affected by the offset and, while many receive …read more
Read more here:: Task & Purpose