Combat-wounded veterans are facing an unfair financial penalty at home, but a new bipartisan bill in Congress aims to fix it.
Under current law, service members forced into early medical retirement due to combat injuries are denied their full benefits. Their military retirement pay is reduced dollar-for-dollar by the amount of disability compensation they receive from the VA. This penalty, known as the "wounded veteran tax," leaves some heroes with no retirement benefits at all.
Supporters, including North Carolina Democrat Congressman Don Davis and Republican Representatives Richard Hudson and Greg Murphy, say military retirement rewards honorable service, while disability compensation covers long-term injuries. Veterans shouldn't have to choose between the two.
The Major Richard Star Act would end this offset. The legislation allows combat-injured medical retirees to receive both their full retirement pay and their VA disability compensation simultaneously. Veterans could choose the option that makes the most financial sense for them, including staying in the Combat-Related Special Compensation program.
Advocates call the bill a long-overdue measure of fairness for those who sacrificed the most.
