Shocking story about military spouses benefit – Does military spouses have to pay benefit money back to the government when they divorced or remarried?

The government paid Freda Green $41,000 in 2003 when her 81-year-old husband died of an illness linked to his 34 years in the Air Force.

widowed military wife

widowed military wife

Green was nervous about cashing the check. Was it a mistake?

Military officials reassured her. The money was a benefit Uncle Sam paid the surviving spouses of veterans. It was hers forever.

Forever ended Nov. 13 when the Brooksville woman got another letter. This one didn’t come with a check. The government wanted the $41,000 back — with interest. Why?

Green remarried.

Widows and widowers around the nation have discovered over the last year that they owe the Defense Department tens of thousands of dollars. The problem involves a quirk in federal law that was supposed to give surviving spouses more benefits, not less.

At the heart of it all is a seemingly absurd detail involving remarriage.

Green, 74, is confused.

“I took the money and paid my bills,” she said. “I paid $6,000 in taxes on it. Now I’ve got to give it back? I don’t understand it at all.”

She isn’t alone. Veteran advocates say they are hearing complaints from baffled spouses around the nation.

“This is no way for the government to treat a military widow,” said Lawrence Gorin, a lawyer in Oregon who advises military spouses.

For lawyers like Gorin, explaining the law is akin to teaching a course in quantum theory.

It gets complicated.

Any explanation starts with the Survivor Benefit Plan, an insurance program offered by the military that pays a monthly benefit based on a veteran’s retirement pay. It was meant to provide financial security to surviving children or spouses.

If the veteran’s death was related to service, then the spouse also became eligible for a benefit from the Department of Veterans Affairs called the Dependency and Indemnity Compensation program.

But there was a catch.

The spouse couldn’t fully collect both benefits at the same time. The government deducted the monthly Dependency and Indemnity Compensation benefit from the monthly Survivor Benefit Plan check survivors were getting.

The net loss for spouses was $1,154 every month.

But Uncle Sam then refunded a portion of the premiums paid into the Survivor Benefit Plan through the years. That’s why Green got a $41,000 check.

But a walk down the aisle changes all that.

In 2009, a federal judge said the government had been misinterpreting the law. The judge said widows and widowers could get both at the same time without any deduction — but only if they remarry, and only if the remarriage happens after age 57.

The judge wasn’t sure why the law included such a stipulation. “Perhaps Congress intended to encourage marriage for older surviving spouses,” he wrote in his opinion.

Veteran advocates think it had something to do with Congress wanting to limit spending by keeping the pool of spouses eligible for both benefits small.

After remarrying in April, Green thought she would get both benefits free and clear. Then came the letter demanding a return of the $41,000.

A Pentagon spokeswoman said she could not comment about Green’s case. But spokeswoman Eileen Lainez said it wouldn’t be fair for a spouse to keep refunded premiums if she is now getting a full monthly Survivor Benefit Plan check.

So the government has started deducting $577 a month of Green’s benefits to pay the $41,000 back. It will take seven years before principal and interest is repaid. Her monthly benefits dropped from $1,683 to $1,106 a month.

Sen. Bill Nelson, a Florida Democrat, introduced legislation in 2009 that would allow spouses to keep the lump sum payments. But legislation has stalled amid concerns about overspending.

Nelson’s office said he will reintroduce legislation in 2011.

Gorin, the Oregon lawyer, said it is ridiculous to demand refunds after all this time. Many of these spouses are elderly and may not live to collect the full benefit owed to them.

“They never told the widows at the outset that they might have to repay the money,” Gorin said. “It’s financially unfair. And it seems to be deceptive on the part of the government.”

Green doesn’t view the $41,000 as a gift. Her husband earned it with his service. He paid hefty premiums. The loss of that $577 a month, she said, won’t break her financially.

But Green said the refund demand is disrespectful to her spouse’s memory. As for all these befuddling rules, Green thinks they need to be simplified so anyone can understand them.

“None of this makes sense,” she said.

William R. Levesque can be reached at levesque@sptimes.com or (813) 226-3432.
[Last modified: Jan 03, 2011 10:00 PM]

Copyright 2011 St. Petersburg Times

Source: http://www.tampabay.com/news/military/article1143324.ece