Representative Adam Smith (D-WA) today announced the results of a Congressional study on the effects of concurrent receipt, also known as the Disabled Veterans Tax, which affects more than 25,000 veterans in Washington State.

Under current law, veterans with 20 years of military service are entitled to receive retirement benefits from the Department of Defense.  In addition, veterans who incurred service-related disabilities are entitled to receive disability compensation benefits from the Department of Veterans Affairs.  If a veteran has both 20 years of military service and a service-related disability, however, the veteran’s military retirement benefit is reduced on a dollar-for-dollar basis by the amount the veteran receives in disability compensation.

“In effect, this is a Disabled Veterans Tax, which taxes our veteran’s income at 100%,” said Smith. “This is unfair and should be changed.  In the Ninth District alone, veterans are losing $33.5 million a year in benefits.  It is unfair to impose this tax on the men and women who have served our country so proudly and who have sacrificed for the freedoms that we enjoy every day.”

Smith has cosponsored the Retired Pay Restoration Act of 2003, passage of which would end the Disabled Veterans Tax for any veteran with over 20 years of military service.  Smith also signed the discharge petition associated with this bill that would force the bill to the floor for a vote and is actively engaging other Members of the House of Representatives to sign the petition and support the Retired Pay Restoration Act.

Congress enacted this unjust law in 1891, and it affects approximately 560,000 disabled military retirees.  Military retirees are the only federal employees affected by the offset.  For 18 years, legislation has been introduced in the House of Representatives to correct this long-standing inequity.  The Retired Pay Restoration Act has received strong bipartisan support in Congress.

“I believe that all our veterans should be justly compensated for their service and dedication, and I am hopeful that we can reach agreement on concurrent receipt and pass this critically important legislation,” said Smith.  “I remain committed to seeing concurrent receipt not only enacted, but fully funded and will do all I can to further its progress.”