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Widow battles offsets in survivor benefits

The widow of a Navy SEAL who died in a 2004 training accident says military survivor benefits need a dramatic overhaul because the monthly payments don’t come close to making up for financial losses in cases like hers.

Michelle Fitz-Henry, an Illinois firefighter and 1991 Persian Gulf War veteran, said her $425 monthly survivor annuity is about 6 percent of the total monthly pay of her late husband, Senior Chief Petty Officer Theodore Fitz-Henry.

Two factors are in play in her situation: how annuities are calculated under the military Survivor Benefit Plan, and the government’s policy of reducing military survivor benefits for those also receiving survivor payments from the Department of Veterans Affairs.

Fitz-Henry said her husband was receiving $6,808 in monthly pay in June 2004, when he was killed at age 41 in a training accident while preparing to deploy to Iraq. Basic pay made up $3,808 of the total, while housing and subsistence allowances came to $2,102. Special pays — diving, parachute and demolition pays and special-duty assignment pay — made up the rest.

Fitz-Henry said her calculation does not include other special pays her husband received in 2004 when he was deployed to Afghanistan.

“The survivor benefit I am receiving does not come close to matching the amount of pay that was lost,” she said. “It isn’t anything like it at all.”

Fitz-Henry, an Air Force veteran, said neither she nor her late husband understood that military survivor benefits would be so small.

“Before he deployed to Afghanistan ... he told me that he wanted me to know I would be taken care of if anything happened,” she said. “I don’t think this is what he expected. I know it isn’t what I expected.”

Fitz-Henry, who has become active in Gold Star Wives since her husband’s death, has pressed for changes for two years, talking with lawmakers and giving a presentation in January to the Veterans’ Disability Benefits Commission.

Congress is considering a change that would partly help people in her situation by reducing or eliminating the offset in military survivor benefits for those who also get VA survivor benefits. In Fitz-Henry’s case, she would get $1,067 more a month if allowed to keep her full military SBP annuity as well as her dependency and indemnity compensation from VA.

In its final report issued in October, the disability benefits commission said survivors should receive their full SBP and DIC when a member dies on active duty or is a military retiree.

Congressional negotiators working on the 2008 defense authorization bill are trying to decide whether to completely scrap the SBP/DIC offset, as proposed by the Senate, or adopt a more modest House-passed plan for a $40 monthly special pay, beginning Oct. 1, 2008, to partly make up for the offset.

The $40 payment would not come close to the $1,067 a month Fitz-Henry loses under current law, a point the Gold Star Wives are trying to stress to lawmakers.

Special pays, BAH

Fitz-Henry’s second concern is that tax-free housing and food allowances and special pays do not factor into survivor annuities.

Steve Strobridge of the Military Officers Association of America, a former director of Air Force compensation, said he knows some survivors are surprised by the SBP payments but does not support changing current policy.

“Special pays and allowances are not part of the SBP calculation because they are not part of the calculation for retired pay, and I don’t think that should change,” Strobridge said.

Military retired pay, he said, should be one of a handful of core benefits — like military basic pay — that are based on rank and years of service.

Adding special pay and bonuses to the retired pay calculation has been considered. But although including special pays and bonuses in retired pay would be especially beneficial to military medical professionals, aviators and nuclear officers, and special operations troops who get large incentives, they are largely viewed as a morale buster for troops who don’t regularly see extra money.

Some lawmakers are open to change. Rep. Robin Hayes, R-N.C., a House Armed Services’ Committee member, has said he supports boosting retired pay for special operations troops by taking into account additional hazardous-duty pay they receive over a career.

Hayes said this would help make a military career more attractive to experienced combat troops whose skills are highly sought by private contractors.

Fitz-Henry said she recognizes the difficulty in changing the status quo but is ready to keep battling. At a minimum, she hopes more military spouses will take a hard look at how much their survivor annuity would be.

“It sure took me by surprise,” she said.