Budget Cuts Affect Veterans and Survivor Benefits

A budget cut in last month’s budget agreement will not only affect all military retirees, but also the benefits received by surviving spouses, according to a recent article. The budget agreement included a cut to the annual cost-of-living increases of one percent, which according to the Pentagon will save $6 billion dollars over the next ten years.

The cut, however, will affect annual payments by the military insurance plan known as the Survivor Benefit Plan. The Plan pays surviving spouses monthly annuities amounting to up to 55 percent of the retiree’s coverage to cover the retirement income lost. The cut will also affect all active duty, reserve and disabled military retirees, as well as combat related special compensation program payments.

House members defended the cut by highlighting what they see as only a marginal loss in payments. For example, according to House Budget Committee Chairman Paul Ryan, the cut would drop pension payments from $1.8 million to $1.7 million for a service person who retires at 38 over the person’s lifetime. Also, according to Congressman Ryan, a majority of military retirees have second careers after leaving the service. However, in reaction to outcry from veteran’s groups, House members are working to reduce the impact of the cut on disabled veterans through an omnibus bill containing over $1 trillion in spending expected to roll out next week.