Military families in line for tens of thousands in benefits under plan to dump the ‘widows tax
Lawmakers are poised to get rid of the military “widows tax” that cost some families of deceased service members tens of thousands of dollars annually in lost benefits payments because of federal accounting problems.
Advocates hailed the move as a major step forward for military spouses who have faced frustration and financial hardship for years.
“This has been a decades-long battle to provide surviving spouses the benefits they have earned and paid for,” said Ashlynne Haycock, deputy director for policy and legislation at the Tragedy Assistance Program For Survivors. “We are incredibly grateful for all those who have fought so hard and for so long to see this and we look forward to seeing the bill become law in the coming days.”
The fix is included in the compromise version of the fiscal 2020 defense authorization bill, released late Monday night. The proposal is expected to be voted on by the full House on Wednesday and the Senate next week.
Addressing the widows tax has been a bipartisan promise of Congress for years, but the expected cost — $5.7 billion over the next decade — has proven to be a barrier in finding a permanent solution.
The problem stems from how the government handles two separate military survivor payouts. The first, the Dependency and Indemnity Compensation program, awards around $15,000 a year to survivors of veterans or troops who die of service-related causes. There is no cost to troops or families to enroll.
The other, the Survivor Benefit Plan, gives families of military retirees who enroll up to 55 percent of their loved ones’ retirement pay after the veteran dies. The life insurance-type payouts are subsidized by DoD, but require enrollees to pay-in part of their retirement benefit to be eligible.
Read the full story at Militarytimes.com