Legislation for Disabled Children Of Veterans Needs Passage
From time to time I hear people exclaiming that an idea is a “no-brainer” meaning, of course, that you do not have to think about it, it is so obviously true. I sometimes find myself on the other side even with some “no-brainers” but here is one that I think a listener would be hard pressed to deny. It is for passage of legislation that would help the disabled children of veterans who saved for their child’s wellbeing. It would not add to the tax bill of average Americans who had not served and it would correct what could simply have been an oversight in the original law passed.
The proposed legislation to which I am referring is the “Disabled Military Child Protection Act” in Congress which was introduced in the U.S. House of Representatives by Congressman Jim Moran (D-VA) as H.R. 2249 and in the U.S. Senate by Senator Kay Hagan (D-NC) and Senator Gillibrand as S. 1076. This is how the system works today and this is how the DMCPA would change it.
When a veteran who has been receiving military retirement pay dies, his retirement pay stops. However, there is an exception. If the veteran at retirement enrolled in a program known as the Survivor Benefit Program (SBP), a surviving spouse or minor or disabled child could continue to receive a portion of the monthly benefit. The program does not come free to the veteran who forfeits 6.5% of the “covered” retirement pay each month in exchange for the knowledge that his widow or minor or disabled child will continue to receive benefits on his death.
As the program is now structured, the pay would need to go to an individual, not a trust, and here is the problem. Summaries of SBP note that, before naming a disabled child as beneficiary, the veteran should consider the effect it might have on the child’s other benefits or potential benefits. This is no idle concern.
Individuals who have been found to be disabled and are covered for their health insurance under Medicaid are severely restricted both in the amount of money they can keep and in the amount of income they can receive. Being named as recipient of SBP on the death of a parent who was a veteran could push the child over the limit and cause him or her to lose Medicaid. So the receipt of monthly income to a disabled child that should be a benefit could instead become the basis for the disabled child’s losing his or her health insurance.
What can be done?
The National Academy of Elder Law Attorneys (NAELA), Pennsylvania Association of Elder Law Attorneys (PAELA), the American Bar Association, the Special Needs Alliance, the Military Coalition, Easter Seals, the Military Officers Association of America (MOAA), and the Consortium for Citizens With Disabilities have all voiced their support for the Disabled Military Child Protection Act. This is what it would do.
If a veteran wishes his disabled child to receive his SBP, the funds could be designated to a special type of trust known as a supplemental needs trust. This type of trust referred to as a 1917(d)(4)(A) or Payback Trust is well known to attorneys and others who work in the special needs field. If funds remain in the trust after the child dies, they are returned to the government.
A supplemental needs (or special needs) trust would allow the disabled beneficiary, namely a “dependent child incapable of self-support because of mental or physical incapacity” to continue to receive benefits which could include housing and medical care while the SBP could be available to pay for additional basic needs such as additional therapies or equipment not covered by Medicaid, transportation, co-pays, and socialization so that the person is not completely impoverished.
Supplemental needs trusts now are used are used routinely for disabled children of non-veterans. As Patricia Dudek, Esq., of NAELA stated in an article published on line earlier this year, “<i>f we are going to treat our veterans and their families differently than the rest of our citizens, I suggest they should be treated better.”
It is suggested the bills now could use additional sponsors. Christopher Gaspar in Congressman Moran’s office and Brian Haan in Senator Hagan’s office were names given as contacts for additional information and to indicate support for the bills.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.