Sending Office: Honorable Vicente Gonzalez
Sent By:
Mark.Footerman@mail.house.gov

        Request for Cosponsor(s)

Cosponsor The Veterans FAIR Act to Prevent Unfair Financial Burden on Retired Veterans

Original Cosponsors: Rep. Don Bacon (R-NE), Rep. Trent Kelly (R-MS), Rep. Seth Moulton (D-MA), Rep. Don Young (R-AK)

Dear Colleague:

In 1972, the Department of Defense established the Survivor Benefit Plan (SBP) as a way to address the financial burden suffered by a surviving family after a veteran dies. The plan, which operates as an annuity with monthly installments paid for 30 years
up to the age of 70, provides a surviving wife and/or child beneficiary with 50% of the military retirement after the veteran’s death. But SBP has some flaws, and these flaws have led to undue financial burden on thousands of veterans across the country. 

Last week, a New York Times feature titled, Veterans Owe Thousands for Survivor Benefits. Why Can’t They Opt Out?, reported that over 19,000 veterans received a notice of collection in 2018, saying they had to either start paying into the Survivor
Benefit Plan or owed thousands of dollars to the government in back payments and interest charges. In addition, the New York Times article reported that, “All service members with eligible beneficiaries at retirement are required to enroll in the Survivor
Benefit Plan, unless they take action to opt out by filling out a form that they and their spouses have notarized. Without filling out that form, the retiree is automatically enrolled at maximum coverage…For years, some service members were opted in to the
Survivor Benefit Plan without realizing it or were being told by Defense Department representatives that if they didn’t want the benefit, they shouldn’t pay the bills. This resulted in thousands of veterans who were enrolled
but not paying their premiums.” The Defense Department is mandating retiring servicemembers to opt into a benefit, sometimes enrolling them automatically, and then encouraging them to simply not pay while only giving them a one year window, between the second
and third year after retirement, to opt out. If they miss the window, SBP is permanent and cannot be withdrawn from unless death or divorce occurs. 

The Veterans Flexibility of Annuities for Income Relief (FAIR) Act of 2018 changes the Survivor Benefits Plan by extending the one year opt out window to six years. In doing so, retired veterans are given plenty of time to transition to civilian life, after
which they can make an informed financial decision regarding SBP. A DoD benefit should never cause undue financial stress on our nation’s heroes. The permanency of the plan would not be affected, and if a veteran chooses to opt out, they would not be able
to opt back in at a later date. In addition, keeping with SBP’s current structure, the premiums paid up until the opt out time would not be refunded.  

Secondly, SBP premiums can be terminated upon the death of a beneficiary, but none of the previously paid installments are refunded. Currently, if a beneficiary were to be diagnosed with a terminal illness, a veteran would be forced to pay monthly premiums
leading up to the death of their loved one, knowing they will never be refunded for the money they are paying in. Under the Veterans FAIR Act, a veteran could immediately opt out of SBP premiums if their beneficiary is diagnosed with a terminal illness or
admitted into hospice. The DoD should not be operating under the premise of making money off of grieving veterans.

The Survivor Benefits Plan is a good benefit with some negative side effects. This bill would reform the Plan to make it more responsible and fair for veterans who must put the health of their finances before the bottom line of the DoD. I hope that you will
join me in cosponsoring this important bill that will help thousands of our nation’s heroes. 

Click the link for the full New York Times article: https://www.nytimes.com/2018/06/20/magazine/veterans-debt-survivor-benefit.html

To become a cosponsor on this bipartisan legislation, please contact the Mark Footerman (mark.footerman@mail.house.gov) or Fred Castro (fred.castro@mail.house.gov).

Sincerely,

Vicente Gonzalez

Member of Congress

Related Legislative Issues

Selected legislative information: Armed Services, Veterans

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