Any discussion of a program related to one’s death is an unpopular one. Most people are not interested in discussing their wills; if they execute one, they put it in the strong box and forget about it. The same philosophy seems to apply to the lack of interest that is shown in a periodic reviewing of the status of one’s life insurance. Actually, there are too few of us who can remember the exact benefits our survivors will derive from our insurance policies.
In any event, whatever the reason, there have not been in the past, nor are there today, many individuals in the Military Services who are cognizant of the various types of compensations, indemnities, or pensions available in our Survivor Benefits Program. The vast majority of active duty officers do have some knowledge of the six months’ death gratuity and possibly of the fact that their survivors may receive a free indemnity insurance. Very few realize, however, that their surviving widows and children will receive Social Security benefits or Veterans’ Compensation.
The purpose of this article is to familiarize the reader with the Survivor Benefits Program, with particular emphasis on the status of the survivor of the active duty officer or enlisted man.
First, let us see what the current status of Survivor Benefits is, as of today. Under existing laws, the survivors of military personnel whose deaths were attributable to service may be eligible for five different types of survivor benefits:
1. The lump-sum death gratuity of six months’ pay.
2. The $10,000 Servicemen’s Indemnity, payable in the form of $92.90 per month for ten years.
3. Veterans’ Compensation payments of $87 per month for a surviving widow (wartime rate), $69.60 per month (peace-time rate), and in each case with additional benefits for dependent children.
4. If a survivor of a Reservist on active duty, the monthly benefits received from the Federal Employees’ Compensation Act amount to 45 per cent of his total pay for a widow, with additional benefit for minor children.
5. Monthly Old-Age and Survivors’ Insurance benefits provided by Social Security may amount to as much as $128 per month for widows with dependent children.
The application of this complex structure of survivor provisions has not been satisfactory for several reasons. Five sources of benefits administered by four agencies in a complicated structure is costly and confusing. The fact that different agencies sponsor the various benefits and that certain of these agencies have obtained substantial improvement in the benefits they sponsor has led to inequities—inequities which become apparent when all benefits are totaled. For example, in some cases, survivors may receive as much as 150 to 160 per cent more income than that of the deceased’s gross active-duty pay and allowances. Also, the benefits are unevenly distributed over the survivor’s lifetime. To illustrate, the widow with two minor children may receive $371 per month for the first ten years of her widowhood, and then, if also during this time her children had reached age eighteen, her benefits will have been decreased to $87 per month, assuming that the maximum wartime compensation benefit was payable. Another example of a glaring inequity is that of the benefits received by the survivor of a Reservist on active duty. A survivor of a Reservist may be eligible to receive from two to three times the benefits provided the survivor of Regular personnel—this being the case since a Reservist’s survivor is eligible for the Federal Employees’ Compensation payments, whereas the Regular active-duty survivor is not. The widow of a Regular Major General or Rear Admiral, who has no dependent children, receives only $87 compensation per month, while the widow of a Reserve Major General or Rear Admiral, on the other hand, may receive $525 per month compensation. Under the present scheme, benefits may also be paid to survivors who are not closely related to the deceased and who suffer no monetary loss through his death.
To complicate the Survivor Benefits problem further, the widow of a deceased serviceman faces quite a dilemma upon the death of her husband. She must look to four different Government agencies administering six different Government programs for the benefits to which she is entitled as a matter of law. Shortly after the death of her husband she may be confronted with a massive stack of forms which must be executed and submitted before benefits are paid. As many as 27 different forms may be required to qualify for the benefits currently available to such survivors. The widow is confronted with a most difficult problem in trying to decide which of the forms she must file in order to receive some income as soon as possible. Without legal assistance or prompt help from the Service concerned, a widow may have to wait months before receiving the full benefits, and in some cases she may never learn of her entitlement to such benefits. To meet this need the Services have established positive means of insuring prompt service to the survivors by way of giving them personal advice and assistance. The Chief of Naval Personnel, for example, has directed that each Commandant provide personal guidance and advice for survivors by designating a specific officer in the District Organization as a casualty assistance officer. This, of course, entails considerable expense as well as time and effort on the part of the Services. It therefore follows that if any new system can be devised which would simplify the Survivor Benefits Program and expedite the operation of it, a considerable savings to our Government would result, while at the same time survivors would experience less confusion and would receive more efficient service.
The best way to show how the current system of Survivor Benefits is working, and at the same time reveal the existing inequities, is to state exact cases. Table I shows the survivor provisions for a widow without children for both the Regular and the Reservist. You will note that this table shows the initial monthly income; as previously mentioned, the Soldiers’ Indemnity of $92.90 per month is for a ten-year period only. The chart compares the initial monthly income of the survivor of a deceased member with the income which the member himself earned while on active duty. As can be seen, the payments to the widow of the Regular are the same regardless of his rank or grade. At the same time, the payments to the widow of a Reservist whose death occurred as a result of service in peacetime are directly related to the pay of the deceased, inasmuch as she receives her benefits under the Federal Employees’ Compensation Act. The chart illustrates three inequities of the present system; first, the fixed payment to the widow of the Regular serviceman regardless of rank; second, the disparity in treatment between the Reservists and Regulars; and, third, the inequity as shown in the unequal percentage ratio of benefit payment to earned income that exists between the junior grade, short-service enlisted person and the senior career officer who has reached the executive level of his profession.
Chart II is a companion to Chart I comparing the initial monthly benefit payments for a widow with two minor children to the active duty earnings of the deceased member. In addition to the three inequities previously discussed, a fourth is now observed, wherein the case of the Regular servicemen, those in pay grades E-l through E-5, and in all cases of Reservists except W-4 and the senior commissioned grades, the widows’ benefits are greater in amount than the actual income of the servicemen prior to death.
Still another inequity exists in the case of the retired officer who had the opportunity and the foresight to participate in the Uniformed Services Contingency Option Act by the fact that if his ultimate death is deemed service-connected, his widow can receive more benefit than the widow of an active-duty officer whose status is the same in all other respects. The widow of the retired officer will thus be eligible to receive a substantial amount of her husband’s retired pay in addition to VA compensation, and thus receive more during her lifetime than the widow of the active-duty officer.
Probably the worst condition that exists in the Survivor Benefits Program is the relatively small amount of compensation that the widow of an active duty officer receives after the children have become of age and the 10-year free indemnity benefit has vanished. In many cases such a widow is unable to get employment, and unless other means of support have been provided, she has but $69.60 per month ($87 under wartime conditions), to live on until she reaches the age of 65, when she may become eligible for social security retirement benefit.
Let us now look at Table III which contains an illustration of monthly benefits received in the case of the widow of a commander in the Navy who has two children. Upon the death of her husband, the widow is thirty years of age, and her children are ages four and seven. By way of comparison the chart will also show the status of a widow whose husband is a Reservist who died on active duty as a result of service- incurred injuries. The pay and allowances of the Commander are $747 per month. The broken line depicts the benefits which are presently available to survivors of a member of the Reserve components; the dotted line shows the benefits for survivors of Regulars. You will note that in the case of the Regular, the widow receives $371 per month for ten years; whereas in the case of the Reserve, she receives $744 per month for ten years. The income for the Regular widow then drops to $278 per month compared to $651 for the Reserve widow when the Servicemen’s Indemnity expires at the end of 10 years. When the first child reaches maturity the comparative incomes are $227 and $516 respectively. Finally, when both children have reached maturity, the widow of the Regular receives $87 (wartime rate) per month, until age 65; whereas the widow of the Reservist receives $336 per month. At age 65 the added benefit of social security increases the amounts to $140 and $389 respectively. The breakdown of the initial income for the Regular is as follows: Servicemen’s Indemnity $92.90, Veterans’ Compensation $150, Old-Age Security Insurance $128-totaling $370.90. The breakdown for the Reservist’s widow’s income is: Indemnity $92.90, Old-Age Security Insurance $128, FECA $522.90, making a total of $743.80.
Stimulated by the report of the Kaplan Committee, the 83d Congress appointed a Select Committee chairmaned by the Honorable William Bates of Massachusetts to undertake a comprehensive study of this situation, and to prepare any remedial legislation which it might deem advisable.
With the change in control that occurred in the 1954 elections, the chairmanship of the Select Committee devolved on the Honorable Porter Hardy, Jr., of Virginia, and the Committee continued its work without interruption into July of this year. During the nine months’ period the Committee worked closely with the Task Force organized within the Department of Defense for this purpose, and with all other interested government agencies, such as the Bureau of the Budget, Veterans’ Administration, General Accounting Office, Department of Labor, and the Department of Health, Education and Welfare. As a result of the combined efforts of these groups, H. R. 7089 was passed by an overwhelming voice vote on July 13 by the House of Representatives, and will be taken up by the Senate early in the next session of the 84th Congress.
H. R. 7089 as passed by the House provides for a revision of the six months’ death gratuity, a greatly increased service compensation based in part on length of service and rate of pay, plus the survivor and retirement benefits of complete participation in social security.
To discuss these provisions in somewhat more detail, the revision of the six months’ gratuity as determined by the Hardy Select Committee is, in effect, to raise the floor from $468 to $800 and impose a ceiling of $3,000 as a maximum. The Committee believed that this change was necessary in order to carry out the basic purpose of the six months’ death gratuity, that is to say, to provide ready cash for rehabilitation of the deceased family. The Bill further provides for the expeditious payments of this benefit. The increased compensation consists of $112 per month, plus 12% of the basic pay of the deceased member. The 12% differential was inserted in the Bill to give some recognition to the years of service and achievement to the member who had through his own efforts advanced in the service.
The contributory social security provides continuity for the part-time serviceman, augments the retirement income of the career serviceman, and provides an extra family benefit for the widows and minor children of deceased members. The elimination of FECA in time of peace places all categories of service personnel on the same basis. Transfer of the free indemnity to compensation eliminates the hills and valleys of the present system, and, of course, eliminates a separate program from the complex administrative problem.
The major advantages of Bill H. R. 7089 are as follows:
1. The Bill relates benefits to the lifetime income of the serviceman, thus providing a realistic standard of living for the survivors commensurate with that enjoyed during the life of the serviceman. This policy is in keeping with practically all other types of survivor benefit plans known in professional and business life.
2. Payments would be more evenly distributed over the lifetime span of the surviving widow, eliminating the “feast or famine” feature of present law. This means that the surviving widow in all cases will have her minimum compensation raised at least 80% over current law. It also means that every widow will receive more compensation in her lifetime.
3. Excessive payments to certain categories of survivors which, in some cases, exceed the income received by the deceased while he was alive, would be eliminated. Also, there would be more positive control over payments to non-dependent survivors.
4. Benefits would be equalized for all categories of personnel—Regulars, Reserves, and National Guard—and administration would be simplified.
5. Equalization of benefits and simplification of their administration is an important factor in the minds of servicemen.
The interest in and support of the Bill by the administration is seen in President Eisenhower’s letter of June 28, 1955 to Congressman Porter Hardy, Jr.:
“I must say, respecting your June sixth letter, that I was much impressed by the thoughtful and detailed work of your Select Committee on Survivor Benefits when we discussed your proposed bill in my office. My feeling is that each of you is entitled to great credit for evolving a generally acceptable solution to this complicated problem which so basically affects the welfare of many thousands of citizens in and out of the military forces. It is my hope that your bill will be favorably received both by the Congress and by the civilian groups directly interested, so that we can see it written into law at the earliest possible date.
“Will you please do me the favor of conveying my appreciation and compliments to your colleagues on your Select Committee? With cordial regard,”
The Senate Finance Committee has been assigned the responsibility of sponsoring H. R. 7089. It is expected that they will take action and hold hearings on this Bill early in January of 1956, and it is hoped that it will receive Senate approval with minimum changes.