Disabled Veterans Tax Termination Act

To amend title 10, United States Code, to permit retired members of the Armed Forces who have a service-connected disability rated less than 50 percent to receive concurrent payment of both retired pay and veterans’ disability compensation, to extend eligibility for concurrent receipt to chapter 61 disability retirees with less than 20 years of service, and for other purposes. 1. Short title This Act may be cited as the Disabled Veterans Tax Termination Act 2. Concurrent receipt of both retired pay and veterans’ disability compensation for military retirees with compensable service-connected disabilities (a) Inclusion of Retirees With Service-Connected Disabilities Rated Less Than 50 Percent Subsection (a) of section 1414 of title 10, United States Code, is amended— (1) by striking Compensation Subject Compensation (2) by striking qualifying service-connected disability service-connected disability (3) by striking paragraph (2). (b) Inclusion of disability retirees with less than 20 years of service Subsection (b) of such section is amended— (1) in paragraph (1), by striking member retired qualified retiree who is retired (2) by striking paragraph (2) and inserting the following new paragraph: (2) Disability retirees with less than 20 years of service The retired pay of a qualified retiree who is retired under chapter 61 of this title with fewer than 20 years of creditable service is subject to reduction under sections 5304 and 5305 of title 38, but only by the amount (if any) by which the amount of the member’s retired pay under such chapter exceeds the amount equal to 2½ percent of the member’s years of creditable service multiplied by the member’s retired pay base under section 1406(b)(1) or 1407 of this title, whichever is applicable to the member. . (c) Conforming amendments reflecting end of Concurrent Receipt phase-In period Such section is further amended— (1) in subsection (a), as amended by subsection (a) of this section, by striking the final sentence; (2) by striking subsection (c) and redesignating subsections (d) and (e) as subsections (c) and (d), respectively; and (3) in subsection (d), as so redesignated, by striking paragraphs (3) and (4). (d) Clerical Amendments (1) Section heading The heading for such section is amended to read as follows: 1414. Members eligible for retired pay who are also eligible for veterans’ disability compensation: concurrent payment of retired pay and disability compensation . (2) Table of sections The item relating to such section in the table of sections at the beginning of chapter 71 of such title is amended to read as follows: 1414. Members eligible for retired pay who are also eligible for veterans’ disability compensation: concurrent payment of retired pay and disability compensation. . (e) Conforming amendment reflecting subsection redesignation Section 1413a(f) of such title is amended by striking Subsection (d) Subsection (c) (f) Effective Date The amendments made by this section shall take effect on the first day of the first month beginning after the date of the enactment of this Act and shall apply to payments for months beginning on or after that date.

Summary: Disabled Veterans Tax Termination Act Amends federal military retired pay provisions to: (1) permit veterans with a service-connected disability of less than 50% to concurrently receive both retired pay and disability compensation; (2) eliminate provisions requiring a phase-in between January 1, 2004, and December 31, 2013, of concurrent receipt of retired pay and disability compensation; (3) eliminate a phase-in of concurrent receipt of retired pay and disability compensation for disabled veterans determined to be individually unemployable; and (4) require a limited reduction in retired pay for qualified disability retirees with less than 20 years of retirement-creditable service.