Bill: Let survivor keep last retirement check

[thedrifter]

Bill: Let survivor keep last retirement check

By Rick Maze - Staff writer
Posted : Monday Jan 29, 2007 16:51:18 EST

A North Carolina lawmaker has renewed his fight to end the government’s practice of electronically withdrawing the last paycheck of military retirees upon their death.

The bill changing the practice is being called Retiree Survivor Comfort Act.

Rep. Walter Jones, R-N.C., a House Armed Services Committee member, said the current practice is unfair to survivors who often are shocked to learn the retirement check that had been automatically deposited can be automatically withdrawn. This happens because federal rules require retirement pay to be terminated when the Defense Finance and Accounting Service is notified of the retiree’s death. The entire final check is withdrawn until a final paycheck, pro-rated to the number of days in a month that a retiree was living, is prepared.

This practice “can have an adverse impact,” Jones said in a statement about his bill, HR 657.

“When the retirement pay is deposited, they use those funds to make payment on items such as mortgages, medical expenses or other living expenses,” Jones said. “Automatically withdrawing those funds can inadvertently cause essential payments to bounce and place great financial strain on a beneficiary already faced with the prospect of additional costs associated with their loved one’s death.”

Jones’ plan would let survivors keep the last check if there is any overpayment, but delay payment of military survivor benefits by one month. This would result in a small bonus for a survivor because retired pay is larger than survivor benefits. Jones said the small extra payment “will provide great comfort to those who are already suffering a loss.”

Jones has tried to get the plan passed since 2003 but has faced problems because of Defense Department objections. Jones hopes to raise the issue later this year when the armed services committee takes up the fiscal 2008 defense budget.

Jones took up the cause at the urging of the Fleet Reserve Association, which represents active, reserve and retired members of the Navy, Marine Corps and Coast Guard.

“It is an important issue for survivors who are many times blindsided” when that last paycheck disappears, said Joe Barnes, the FRA’s national executive secretary.

Ellie

[thedrifter]

Helping veterans' survivors
January 30,2007
CHRISSY VICK
Daily News Staff

When a military retiree dies, there is often a widow or widower left behind with a huge financial burden.

It's something Randy Reichler sees every week.

As the retired affairs officer for Camp Lejeune, Reichler handles an average of 87 widows and widowers who are going through that very thing each year.

"They often don't know what (bills) are coming out; they have no insurance," he said. "There were three this last year that lost their homes, so the financial hardship is immense when this happens. The funeral cost is rough on them."

Add to that the burden of losing that month's paycheck. According to federal regulations, once the Defense Finance Accounting Service is notified of a death, the retiree's pay is immediately ceased. DFAS electronically withdraws the last payment from the checking account and later sends a check to the beneficiary for a pro-rated portion of the military pay when the retiree was still living.

"I have literally had spouses have their husband die on the 31st of the month and DFAS stopped the check and turned around and repaid it 60 days later, when they didn't need to stop it at all," he said.

For many, losing a paycheck immediately after the death is the worst timing possible. It could mean bounced checks and unpaid bills. Reichler has to counsel widows on how to deal with that, among other things.

"Widows have often not dealt with the finances," Reichler said. "I'm in an age where the female usually took care of the finances, but older retirees' spouses often never dealt with finances."

U.S. Rep. Walter B. Jones, R-Farmville, hopes one House bill can help. The Military Retiree Survivor Comfort Act, or H.R. 657, was recently introduced by Jones to offer immediate financial relief to the surviving beneficiaries of retirees, according to a press release.

The same legislation was introduced in recent years, but never made it out of committee.

Jones said the bill would "forgive the overpayment" made to the surviving beneficiary if they have a joint bank account. To offset that cost, the recipient receiving the payment would "forgo the first month of Survivor Benefit Plan payments," according to the release.

"The individual amounts will be small, but they will provide great comfort to those who are already suffering a loss," Jones said.

Reichler says the bill would be a short-term benefit.

"People need a little bit of transition time," he said. "There is a lot we have to do when somebody dies - it's a lot to go through."

Amelia Grissett, director of Onslow County Veterans Services, sees that also.

"Sometimes their money is frozen, sometimes for 45 days; and they do not see any of that money," Grissett said. "So that would be an immediate help to them."

Veterans Affairs assistance can also take months before going into effect to help a spouse, she said, adding a further burden.

"We try to inform them about what's going to occur with their money and what they're going to expect," she said. "We have to let them know that basically their money is going to be tied up for a period of time."

Sometimes spouses have to depend on family for help, she said.

Clifton Major, a volunteer veteran service officer with the Disabled American Veterans, hopes that never happens to his own family. The retired Marine says H.R. 657 is a good idea.

"Death is unexpected," he said. "If I were receiving just the retired pay, that would give me some peace of mind for my family."

But for a veteran to really have a peace of mind, they need to prepare for such things, he said. And anything the government can do to help is a big deal.

"It gives them an opportunity to restructure their finances so that it's not coming when everything is happening when they're not emotionally ready to think about business," Major said. "I think it would be good to recognize the fact that at that time the family is going through a lot."