Defense bill includes fix for military families’ survivor benefits

The House-Senate defense bill agreement released by lawmakers Monday night includes a provision that would allow military families to receive more money in survivor benefits.

The conference report on the National Defense Authorization Act (NDAA) includes a repeal of a survivor benefits’ offset often referred to as the “widow’s tax.” The elimination is phased in over three years.

The House is expected to vote on the agreement as soon as Wednesday, and the bill is ultimately expected to be signed into law.

Spouses are eligible for two types of survivor benefits, one from the Department of Defense (DOD), and the other from the Department of Veterans Affairs (VA).

Under current law, the amount received under one of the programs offsets the amount received under the other, reducing the total amount of benefit a spouse could receive. For example, if someone was entitled to $2,000 in a month under the DOD program and $500 in a month under the VA program, he or she would receive a total of $2,000, not $2,500.

The offset has led surviving spouses of military members killed in Iraq or Afghanistan to often put the DOD benefit in their children’s names, rather than theirs. This allows the families to receive the full amount of DOD and VA benefits in the near term, but the families then stop receiving the DOD benefit when the children reach adulthood.

In addition to repealing the widow’s tax, the NDAA agreement would repeal the option for the DOD benefit to be a child-only benefit, but spouses who put the benefit in their children’s names will be able to restore their own eligibility for the benefit. This portion of the bill would take effect on Jan. 1, 2023.

Military families have long been pushing for Congress to end the widow’s tax, and the issue has significant bipartisan support among lawmakers.

The version of the NDAA that passed the House earlier this year included the repeal of the widow’s tax, but the Senate version did not. However, Senate Armed Services Committee Chairman James Inhofe (R-Okla.) had said last month that he thought widow’s tax elimination would be a part of an NDAA conference report because there was overwhelming support for the change, despite its cost.

Advocates for military families praised the news.

“When someone volunteers to serve, they do so believing their family will be taken care of if the worst happens,” National Military Families Association Executive Director and CEO Ashish Vazirani said in a news release. “We have not been properly taking care of those families. The news that decades of advocacy have finally paid off is something to celebrate.”

The provision is also being praised by lawmakers on both sides of the aisle, such as Sens. Doug Jones (D-Ala.) and Susan Collins (R-Maine), who had introduced standalone legislation to eliminate the survivor benefits offset.

“Today, we can finally see the light at the end of the tunnel and I am more hopeful than ever that we can finally end this injustice and show our military families how much their sacrifices truly mean to our country,” Jones said in a statement late Monday.

Collins called repeal of the widow’s tax “a step toward fulfilling our obligation to military families who have sacrificed so much for our country.” 

Military families are also pushing for Congress to fix an unintended consequence in the Republicans’ 2017 tax-cut law that raised taxes on military survivor benefits received by children.

The Senate passed a standalone bill on that issue earlier this year, and soon after the House passed a retirement bill that included a fix to that issue. The House’s bill has stalled in the Senate for reasons unrelated to the issue involving the tax increase for Gold Star families.