What the Elimination of the Widow’s Tax Means for Veterans Benefits

April 1, 2020

A federal law passed in the 1970’s laid out how Veteran’s Affairs would allocate military survivor payments. Two separate payment plans were established:

1. Dependency and Indemnity Compensation Program: awards approximately $15,000 per year to qualified survivors.

2. Survivor Benefits Plan: qualified survivors receive up to 55% of deceased veteran’s retirement pay.

For over 40 years, military survivors who took advantage of the new type of payout could not also benefit from the other. For the last two decades, lawmakers have considered making changes to the old law, in response to many who advocated for change.

Last April these advocates congregated in Washington, D.C. to meet with legislators. This meeting initiated the needed change to eliminate the “Widows Tax”. On December 20, 2019 the 2020 National Defense Authorization Act (NDDAA) was signed into law.

What This Means

Additional benefits will begin incrementally over three years starting in 2021. Full benefits commence January 1, 2023. Survivors will not receive retroactive benefits. This change is likely to impact approximately 65,000 military families.

Veterans – At Stouffer Legal, we work with veterans and their spouses to determine eligibility for Aid and Attendance and/or Medicaid. We assist with all necessary paperwork and know the process. For more information, contact our firm at 443-470-3599.

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