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Major Changes Looming for VA Compensation
Changes in the way the VA Processes Claims, and How Treasury Makes Payments

Allison A. HickeyAccording to Allison A. Hickey, Undersecretary for Benefits for the Veterans Administration, the half-million VA claims that are backlogged, defined as claims left undecided for more than 125 days, is unacceptable, but that the VA is taking steps to fix the problem with additions to, and better training for, its claims specialists, process changes, and an emphasis on "relationship management."

Beyond that, the Treasury Department is moving from paper checks to electronic payments beginning March 1, 2013, meaning that military retirees and annuitants currently receiving paper checks—about 1% of retirees and 4% of annuitants—will have to get direct deposit.

New Program to Hire Vets as First Responders


During his State of the Union Address, President Barack Hussein Obama announced a new initiative to hire veterans into the ranks of the country's first responders, and at a recent speech before an audience of veterans and first responders, a speech long on platitudes and sketchy on details, he spoke of the need to hire more veterans. “First, we want to help communities hire more veterans as cops and firefighters,” he said. “Over the past few years, tight budgets have forced a lot of states, a lot of local communities, to lay off a lot of first responders.”

Obama also praised America's veterans for their resolve, skills and experience. “They’ve saved lives in some of the toughest conditions imaginable,” he said. “They’ve managed convoys and moved tons of equipment over dangerous terrain. They’ve tracked millions of dollars of military assets. They’ve handled pieces of equipment that are worth tens of millions of dollars. They do incredible work. Nobody is more skilled, more precise, more diligent, more disciplined.”

While Obama's speech was short on particulars, one concrete thing veterans can turn to came out in a conference call between reporters and Secretary of Veterans Affairs Eric Shinseki. This program, the new Veterans Job Corps initiative, is designed to ease the way to employment for veterans returning home.

According to Shinseki, the US owes those who volunteered to serve in uniform a debt of gratitude.” He added that, “we must ensure that veterans who come home from Afghanistan and Iraq get the opportunities they deserve.”

Click here to read more about these and other retirement news stories.


Help in a Time of Crisis

When your country was in crisis, you answered the call. Since 2007, even if you were never registered with the VA or enrolled in VA healthcare, the VA will answer your call with the Veteran's Crisis Line, at 1-800-273-8255 (Press 1) or on the Internet at VeteransCrisisLine.net (anonymous online chat). Since its inception, the Line has taken more than 400,000 calls, and initiated some 14,000 life-saving rescues.

The Line is staffed by trained, qualified, and caring VA Responders offering free, confidential support around the clock for problems ranging from mental health issues, to relationship problems, to coping with the transition back to civilian life.

Going from the military to civilian life is hard; but if things get rough, you don't have to go it alone. The Veterans Crisis Line is there, its free, and its ready to help.

VA Could Face Sequestration Cuts

Secretary of Veterans Affairs Eric ShinsekiAt a July 25, 2012 joint hearing of the House Veterans’ Affairs and Armed Services Committees, the Secretary of Veterans Affairs, Eric Shinseki, confirmed that under sequestration, VA would face cuts, possibly affecting the administration of veterans’ benefits and services, stating, “VA is exempt from sequestration except for administrative costs… I don’t have a definition of administrative costs right now.”

“President Obama publicly said Monday at the VFW Convention that VA is exempt from sequestration, yet the Secretary conceded today that VA would face cuts early next year if a sequester takes place,” stated Rep. Jeff Miller, Chairman of the House Committee on Veterans’ Affairs. “Since last August, I have been asking this question and until today, I have received nothing but double speak. I am now demanding that VA and the President define ‘administrative costs.’ Does this mean closing veterans’ hospitals, fewer claims processors to help veterans with their disability compensation, longer wait times for veterans suffering from the invisible wounds of war or those having to bury a loved one, not to mention the possible impact on homeless veterans’ programs and research to care for our wounded warriors? Congress, and more important, our veterans, deserve an honest, straight-forward answer.”

In the first joint hearing of the two Committees in recent history, Members also addressed serious concerns that the Departments of Defense and Veterans Affairs were not working fast enough toward a seamless transition for service members leaving the military. Secretary Shinseki noted that “over the next five years, there is the potential for one million serving men and women to either leave military service or demobilize from active duty,” raising numerous questions on the already convoluted transition process for veterans.

Wait times for the Integrated Disability Evaluation System, which assists wounded warriors transition from DoD to VA, are already at record highs, the disability claims backlog has tripled in the past four years, and a majority of veterans seeking mental health evaluations wait an average of two months for an appointment.

“Despite repeated assurances from VA and DoD to provide a ‘warm handoff,’ it is clear that is not happening. Unfortunately, what we heard today, we have heard before. And what is clear is that there are still no tangible results demonstrating that the silos between the departments have been broken down,” Miller said. “American know-how put a man on the moon in less than a decade, but 50 years later we can’t produce single electronic medical database for our military and veterans in the same span of time? There is clearly something wrong with this system, and the time has come to see real change and real results.”

RCRetirement: The Blog

SGT David J. Saunders, RPAM, Michigan National Guard.

So You Think You Can Get More Retired Pay by Waiting Until age Sixty-Five...and Avoid Taxes, too? Think About it Some More.

I obviously mean no offense to service members who have held (or currently do hold) this belief, but this has to be one of the funniest notions I’ve encountered since I joined the retirement community. Only a few weeks ago, I received a call from a sixty-five year old retiree who wished to apply for his retired pay. When I asked why he had waited so long to apply, he stated that he had a good job until recently and thought he could both get more money by waiting and avoid the taxes on the additional income (the retired pay) at the same time.

I admit that I nearly laughed at this point and avoided it only by gritting my teeth (I’m glad he was not actually in front of me at the time). Fortunately for this gentleman, he realized the fallacy of his thinking almost as soon as it was out of his mouth. He almost immediately followed up his statement by saying he was probably in for a huge tax withholding when all of the back pay came his way. I concurred with him and proceeded to assist him with the application.

A military pension, unlike Social Security, does not use a different formula if you wait longer to apply for it. The calculation is still based on your total creditable retirement points and the value of those points for the years you were not receiving it. If, for example, you were eligible to receive retired pay in 2009, but waited until 2012 to apply, your back pay would be based on the value of your retirement points in the years 2009, 2010, and 2011. The total amount of this lump sum payment would equal the same amount you would have received if you had been receiving monthly payments since 2009. The only difference might be in the amount of tax withholding that is taken from that lump sum payment (it will likely be more).

Not only is there no benefit to applying on a date after age sixty (or whatever date your retired pay eligibility date happens to be), you might actually lose money if you wait too long. Current law only requires the government to pay you back pay for up to the last six years (see the Back Pay Act here). This means if you apply on your sixty-sixth birthday, you are actually losing money for every day over sixty-six that passes until pay begins. There are some instances when Defense Finance will pay back pay for over six years, but these cases are very rare. You definitely should not count on such a result if you are over the age of sixty-six. Waiting doesn’t improve matters for you. Apply for retired pay as soon as you are eligible to do so.

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