The Military Widow’s Tax Elimination Act is a recently included provision of the 2020 National Defense Authorization Act (NDAA), an annual bill that allocates government expenditures on the military. The provision reverses a 1972 decision that limited government benefits for families who qualified for two different survivor benefit programs.
Sen. Doug Jones (D-Ala.) and Sen. Susan Collins (R-Maine) spearheaded the provision, which a number of surviving military spouses have been trying to pass for decades. The NDAA passed Wednesday by a vote of 377-48 in the House. It is also expected to pass in the Senate next week, where it has close to 80 co-sponsors.
“This provision we secured in the NDAA is a major victory for surviving military and retiree spouses to whom we are deeply indebted,” said Collins, in a press release announcing the provision would be included in the NDAA. “Its repeal is a step toward fulfilling our obligation to military families who have sacrificed so much for our country. I am glad that Senator Jones and I, along with a bipartisan group of our colleagues, were able to correct this glaring inequity.”
“Words cannot begin to express the gravity of this news for the tens of thousands of Gold Star families who have been hurt by this policy for four decades,” added Jones. “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.”
The bill aims to eliminate a costly benefit offset affecting thousands of military widows and widowers. The “widow’s tax” currently applies to survivors who are eligible for both the government’s Dependency and Indemnity Compensation (DIC) program and enrolled in the Survivor Benefits Plan (SBP).
The SBP is a government-subsidized voluntary program similar to life insurance, entitling surviving spouses to up to 55 percent of their deceased veteran’s retirement pay, but requiring the veteran to partially fund it by paying in with retirement funds. If survivors are enrolled in both programs, their SBP benefit payment is reduced dollar-for-dollar against their DIC benefit, costing some families as much as $1000 per month. The new provision would give survivors full benefits from both programs.
“It has just been one of the most unfair programs that the United States has had that has been hoisted on military families,” said Jones to WDAF. “They now know people truly care.”
The change reportedly has a price tag of around $5.7 billion over 10 years. If the bill passes as expected, benefits are set to increase over the course of three years, with surviving spouses receiving full payouts by 2023.
