A bipartisan bill has been introduced in the House of Representatives that fixes a flaw in earlier legislation and would finally allow all veterans to allocate pension payments to their survivors with special needs without fear that the payments will jeopardize the survivor's receipt of other government benefits. 

Retired members of the military can elect to fund a Survivor Benefit Plan (SBP)  that will pay the retiree's survivors a monthly payment to help make up for the loss of retirement income. When the retiree dies, the SBP will pay up to 55 percent of the veteran's pension to his or her spouse or children.  

Up until 2014, if a child with special needs received the pension payment, she could lose other important government benefits like Supplemental Security Income or Medicaid because the income from the pension was counted as the child's for purposes of calculating her eligibility for those other government benefits. That year, Congress passed a new law allowing veteran retirees to designate a special needs trust as their beneficiary to avoid the benefit being counted as belonging to the child. 

However, only those veterans who had previously designated “Spouse and Child” or “Child Only” as their beneficiary could shift the designation to a special needs trust.  Those veterans with special needs dependents who had already designated “Spouse Only” as the beneficiary to avoid jeopardizing their child's other benefits were blocked from switching the beneficiary to a special needs trust.

One such veteran was Debra Nixon, a veteran of the Uniformed Public Health Corps and a resident of New Jersey's 11th Congressional District.  Nixon's representative, Democrat Mikie Sherrill, has introduced a bill to repair this defect in the law.  The Debra Nixon Special Needs Trust Inclusion Act, cosponsored by Florida Republican representative Gus Bilirakis, would authorize a limited period when enrollees could change their designee to “Spouse and Child” or “Child Only” and take full advantage of the benefits of the 2014 law. The legislation would also designate the creation of a special needs trust as a “qualifying life event” that would permit parents to change their beneficiary designee once the trust has been established.

“The Survivor Benefit Plan is an earned benefit for our men and women in uniform,” Rep. Sherrill said in a press release. “The families of our service members deserve to take full advantage of the program. Many of our veterans with dependents with special needs, including Debra Nixon in my district, haven't been able to designate their children as beneficiaries for fear of imperiling the other benefits their dependent receives. It is past time for that to change.”

The bill, H.R. 2109, was delivered to the House Armed Services Committee in March.  There is no companion measure in the Senate so far.

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