A bill to amend title 10, United States Code, to permit retired servicemembers who have a service-connected disability to receive disability compensation and either retired pay or Combat-Related Special Compensation and to eliminate the phase-in period with respect to such concurrent receipt.

SECTION 1. FINDINGS.

    Congress finds the following:
            (1) For more than 100 years before 1999, all disabled 
        military retirees were required to fund their own veterans' 
        disability compensation by forfeiting $1 of earned retired pay 
        for each $1 received in veterans' disability compensation.
            (2) Since 1999, Congress has enacted legislation every year 
        to progressively expand eligibility criteria for relief of the 
        retired pay disability offset and further reduce the burden of 
        financial sacrifice on disabled military retirees.
            (3) Absent adequate funding to eliminate the sacrifice for 
        all disabled retirees, Congress has given initial priority to 
        easing financial inequities for the most severely disabled and 
        for combat-disabled retirees.
            (4) In the interest of maximizing eligibility within cost 
        constraints, Congress effectively has authorized full 
        concurrent receipt for all qualifying retirees with 100 percent 
        disability ratings and all with combat-related disability 
        ratings, while phasing out the disability offset to retired pay 
        over 10 years for retired members with noncombat-related, 
        service-connected disability ratings of 50 percent to 90 
        percent.
            (5) In pursuing these good-faith efforts, Congress 
        acknowledges the regrettable necessity of creating new 
        thresholds of eligibility that understandably are disappointing 
        to disabled retirees who fall short of meeting those new 
        thresholds.
            (6) Congress is not content with the status quo.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that military retired pay earned by 
service and sacrifice in defending the Nation should not be reduced 
because a military retiree is also eligible for veterans' disability 
compensation awarded for service-connected disability.

SEC. 3. ELIGIBILITY FOR PAYMENT OF BOTH RETIRED PAY AND VETERANS' 
              DISABILITY COMPENSATION FOR CERTAIN ADDITIONAL MILITARY 
              RETIREES WITH COMPENSABLE SERVICE-CONNECTED DISABILITIES.

    (a) Extension of Concurrent Receipt Authority to Retirees With 
Service-Connected Disabilities Rated Less Than 50 Percent.--Section 
1414(a) of title 10, United States Code, is amended to read as follows:
    ``(a) Payment of Both Retired Pay and Compensation.--
            ``(1) In general.--Subject to subsection (b), an individual 
        who is a qualified retiree for any month is entitled to be paid 
        both retired pay and veterans' disability compensation for that 
        month without regard to sections 5304 and 5305 of title 38.
            ``(2) Qualified retirees.--For purposes of this section, a 
        qualified retiree, with respect to any month, is a member or 
        former member of the uniformed services who--
                    ``(A) is entitled to retired pay, other than in the 
                case of a member retired under chapter 61 of this title 
                with less than 20 years of service creditable under 
                section 1405 of this title and less than 20 years of 
                service computed under section 12732 of this title; and
                    ``(B) is entitled for that month to veterans' 
                disability compensation.''.
    (b) Repeal of Phase-In of Concurrent Receipt of Retired Pay and 
Veterans' Disability Compensation.--Section 1414 of title 10, United 
States Code, is further amended--
            (1) by striking subsection (c);
            (2) by redesignating subsections (d) and (e) as subsections 
        (c) and (d), respectively; and
            (3) in subsection (d), as redesignated, by striking 
        subparagraph (4).
    (c) Clerical Amendments.--
            (1) The heading for section 1414 of title 10, United States 
        Code, is amended to read as follows:
``Sec. 1414. Members eligible for retired pay who are also eligible for 
              veterans' disability compensation: concurrent payment of 
              retired pay and disability compensation''.
            (2) 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.''.

SEC. 4. COORDINATION OF SERVICE ELIGIBILITY FOR COMBAT-RELATED SPECIAL 
              COMPENSATION AND CONCURRENT RECEIPT.

    (a) Eligibility for Tera Retirees.--Section of section 1413a(c) of 
title 10, United States Code, is amended by striking ``entitled to 
retired pay who--'' and all that follows and inserting ``who--
            ``(1) is entitled to retired pay, other than a member 
        retired under chapter 61 of this title with less than 20 years 
        of service creditable under section 1405 of this title and less 
        than 20 years of service computed under section 12732 of this 
        title; and
            ``(2) has a combat-related disability''.
    (b) Amendments to Standardize Similar Provisions.--
            (1) Clerical amendment.--The heading for paragraph (3) of 
        section 1413a(b) of title 10, United States Code, is amended by 
        striking ``rules'' and inserting ``rule''.
            (2) Standardization with crsc rule for chapter 61 
        retirees.--Section 1414(b) of such title is amended--
                    (A) by striking ``Special Rules'' and all that 
                follows through ``is subject to'' in paragraph (1) and 
                inserting ``Special Rule for Chapter 61 Disability 
                Retirees.--In the case of a qualified retiree who is 
                retired under chapter 61 of this title, the retired pay 
                of the member is subject to''; and
                    (B) by striking paragraph (2).

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall take effect as of January 1, 
2006, and shall apply to payments for months beginning on or after that 
date.

Summary: Expresses the sense of Congress that military retired pay should not be reduced because a military retiree is also eligible for veterans' disability compensation awarded for a service-connected disability.

Allows the receipt of both military retired pay and veterans' disability compensation with respect to any service-connected disability (currently, only a disability rated at 50 percent or more). Repeals provisions phasing in the full concurrent receipt of such pay through December 31, 2013.

Makes eligible for the full concurrent receipt of both veterans' disability compensation and either military retired pay or combat-related special pay those individuals who were retired or separated from military service due to a service-connected disability.