Military Survivor Benefits and SNTs
Will Congress Correct this Inequity?
By Kelly A. Thompson, Esq., Virginia
Poor word choice can derail intent. Nearly a decade ago, legislation governing the military’s Survivor Benefit Plan stipulated that payments be made to a “person.” A literal reading of that language has meant that veterans who have children with special needs can’t assign those funds to a special needs trust (SNT), an estate planning tool that many civilian families consider crucial. Holding monthly payments in an SNT, rather than leaving them directly to a child with disabilities, protects the individual’s eligibility for means-tested public programs, such as Medicaid and Supplemental Security Income (SSI). Money from the trust can then be used to pay for therapies not covered by the government, as well as quality-of-life expenses such as a service dog, computer or music lessons.
There are over 1,000 military dependents with severe disabilities, and there is significant support for correcting what many believe was a drafting error. Last spring, members of the Special Needs Alliance (SNA) and the National Academy of Elder Law Attorneys (NAELA) visited the Hill, seeking sponsors for legislation to address the situation. Other supporters include the Military Coalition, Military Officers Association of America, Easter Seals and the Consortium for Citizens with Disabilities.
In June, for the second year running, Rep. James Moran (VA-8) introduced the Disabled Military Child Protection Act, H.R. 2249, which has remained mired in committee. Senator Kay Hagan (D-NC) introduced similar legislation, S. 1076 but it, too, appears to have little chance of making it to the floor. Both bills would enable Survivor Benefit Plan annuities to be directed to an SNT “for the sole benefit of a disabled dependent child of a plan participant.”
Sen. Kristen Gillibrand (D-NY), who co-sponsored the Senate bill, subsequently appended its language to the National Defense Authorization Act (NDAA) for Fiscal Year 2014, S. 1034, and therein lies the best chance of success. NDAA has now been reported out of the Senate Armed Services Committee and placed on the Senate calendar. If the survivor benefit language withstands a floor vote, its next hurdle will be the conference committee, where differences between the Senate and House versions of NDAA will be negotiated. A recently passed House version of NDAA does not include a survivor benefit provision.
Advocates have expressed shock at how difficult it has proven to make this change. Let’s hope that this important legislation doesn’t fall victim to congressional gridlock.Posted: July 19th, 2013 | 2 Comments »