History of the Military Pay Offset

We continually hear issues concerning disabled retirees losing their retirement pay in lieu of their receiving VA compensation pay. However, no one actually addresses the real issues of just how this came about? Also, it has never completely surfaced how the US Congress went about making this change, and the real reasoning behind why they took the disabled military retirees’ pay away from them in 1891. The general population is not aware of the fact neither the Department of Defense, nor the Department of Veterans Affairs even existed in 1891, as we know it today. The US Congress and the US Congress alone is responsible for the disabled military retirees having their retirement pay taken away from them. The US Congress being the governmental body that passed the law taking away the retirement pay, results in their being the only governmental entity that can pass a law returning the retirement pay.The following is a history of the sequence of events leading up to the offset, as we know it today:

Between 1790 and 1891 while everything came under the War Department, the military retirees received both their retirement pay and disability compensation. This was a benefit given to military members as an enticement for them to stay until retirement. Further, the Civil War was during this time frame and there were bitter feelings between the Union Army veterans and Confederate Army veterans. This was attributed mainly due to the Union veterans getting perks at the end of the war and the Confederate veterans were told to go home with nothing. Also, during this period of time while Benjamin Harrison was a Senator under President Grover Cleveland’s term in office he (Harrison) tried to get the new disability pension change into the law. However, President Cleveland vetoed his attempt and left it as a Military Retirement Benefit only.

During the 1890-1891 Congressional Legislative Session, Senator Benjamin Harrison (who had been a Brigadier General in the Union Army) became President and got his new law passed to provide pensions for disabilities incurred by the Civil War veterans who could not work (this did not include Confederate veterans). This was the beginning of everyone who sustained injuries and/or illness as a result of active military service being enabled to receive disability payments. However, Senator Francis Marion Cockrell of Missouri (who had been a Brigadier General in the Confederate Army.) publicly addressed opposition in the issue of officers who were currently on the active duty list being allowed to draw both a pension for disability and their active military pay. Using these issues to get back at the Union veterans (who were getting compensated) for not recognizing the Confederate veterans for compensation. He successfully concluded his fight through using the logic it would be a cost saving measure. When this law was passed the Congress had many Senators and Representatives who had either been in the Confederate Army or were sympathizers to their cause. Thus, resulting in the amendment being added excluding active duty military and disabled retired military for benefits under the new law. Now all disabled retired military have to pay for a grudge payback between two competitive entities in an effort to balance the score from days gone by. The thought of how this would affect future generations was never brought into consideration. The immediate gratification of victory was the primary goal. (Ref: World Book on line and the Congressional Research Service Report 95-469).

In 1930 they brought the Veteran Affairs into existence and it later became the Department of Veteran Affairs in the later 1930s. On May 27, 1944, the US Congress then passed into law, Public Law 78-314 the requirement of a dollar for dollar offset reduction of retired military pay for every dollar of VA compensation received, and if the retiree is 100% disabled they forfeit all of their retirement. This new law was placed in the US Code, Title 38, Sections 5304 and 5305. Now it must be kept in mind Veteran Affairs only funds in their budget for compensation received for service connected injuries and/or illnesses. The VA has nothing to do whatsoever with the budgeting of military retired pay. (Ref: Public Law 78-314 & US Code, Title 38, Sections 5304 & 5305) Military retirement pay was regulated by the War Department in accordance with the US Code Title 10, Chapter 71. The US Congress passed laws directing in Chapter 71 to use the directives set forth in Title 38 concerning disabled military retirees. In 1949 the War Department became The Department of Defense and all retired military pay continues to be controlled by that department. (Ref: US Code, Title 10, Chapter 71).

In 1984 the US Congress passed a bill “The Military Retirement Fund” these guidelines were incorporated in US Code Title 10, Chapter 74, Sections 1461 through 1467. This placed the Secretary of Defense with the responsibility of placing in the Department of Defense budget funding to pay all military retirees. There is nothing in this chapter instructing the Secretary to not draw down for those retirees who are reported as receiving disability compensation. This results in a surplus that is sent back to the US Department of Treasury, who places the overage into money accounts and the surplus is spent as they see fit for items not included in the budget. All others working with the US Military who are Civil Service Employees in all branches of the Government, including The Department of Defense, The Armed Forces, Senators, Representatives, and Presidential Staff draw both their full retirement pay and full VA compensation for service connected injuries and/or illnesses. Keep in mind the US Congress also passed into law it is unlawful to discriminate. However, this is clearly a case of discrimination in the purest sense and definition of the word. (Ref: US Code, Title 10, Chapter 74, Sections 1461 through 1467. Also, discrimination of any veteran (treating one or group any different from any other veteran) is addressed throughout Title 38 and is prohibited under penalty of violation of the law.) Keep in mind discrimination laws did not exist 100 years ago. Through evolution and education many laws became outdated and actually became an illegal act by the passage of new Congressional law changes and this is one of those instances.

The US Congress has consistently for the past 100 years looked at only the cost factor. Also, their thought process for the most part in the past has been it is best to continue taking the money away from the disabled retirees as they are of no further use to the US Government. This sounds like it is a very callous statement, however history speaks for itself. Hopefully someday we will see the record set right. As you can see the issue of duplicate pay actually does not exist, nor has it ever existed in the past. The Disability Pension benefit from its inception was designed exclusively as a retirement incentive for the military to have a means for the retention of an experienced soldier population. Also, the cost factor would in reality be between 1.0 billion to 1.9 billion a year to reinstate it. The hate between parties has been resolved (north & south), the system has been realigned, and taken from military control ensuring the allegations made in 1890-91 of active duty personnel being paid disability pensions are now days gone by.We can no longer change the past. However, we can effect positive change in the future through bringing equality and dignity back into lives of our disabled military retired veterans and society as a whole.

Terry L. Quisenberry, Sr.
CWO, (Ret) Army
Lawton, OK
100% Disabled Service Connected after 27 years service.