Archive for the 'VA Benefits' Category

Clearing the Confusion on Post 9-11 GI Bill Transfer Option

Sep 11 2013

As I conduct classes on the Post 9-11 GI Bill (P911GIB) on bases, I find there is still confusion about the rules to transfer the benefit. Here is a quick reference guide.

Transferring the P911GIB to family members is an option controlled by the DOD. It can be turned on or off. Currently there are no discussions about turning the option off but realize the option isn’t permanent.

DOD is using the transfer option as a retention tool. Transfer your benefit and you have to agree to stay in the Service for 4 more years.

During the transition period in the early years of Post 9-11 GI Bill implementation, the following table provided the few exceptions to the 4-year commitment.  However, the transition provisions expired 1 Aug 2013 so all must agree to serve 4 years now.

The following was the transition implementation conditions in case you hear about this policy and want to compare then and now.

First, what month and year did you complete 20 years of service? For Guard or Reserves, what did your Notice of Eligibility for retirement letter state as your month and year for 20 years? Take that month and year and plug it into this chart to figure what your service commitment would have been. If you aren’t on this chart, you would have served 4 years as of the date you transfer the benefit.

gibillclearBecause of the retention policy being used by the DOD, it means you have to be currently serving to transfer any or all of the benefit otherwise you can’t be retained. All you folks already out of the Service, separated or retired, can’t transfer. There are no waivers. You folks in the Guard or Reserves do not have to be on active duty orders to transfer but you do have to be serving to transfer. Check this site if you have specific Service related questions about the service commitment–scroll down the page.

If you want to fight for the transfer after you are out of the Service, good luck. The only possible remedy is with the Board for Correction of Military Records (BCMR). Search on line for the BCMR application procedures. Chances are slim to none.

The date you transfer the benefit starts the clock on the service commitment. You probably want to transfer some benefits immediately if you think transferring the benefit might be a possibility for you in the future. Start the commitment clock sooner rather than later. Transfer a month to each beneficiary just to establish the transferred benefit and you can move months of benefit around among family members later if you want. You serve one service commitment for the first transfer. You do not serve separate commitments for each transfer afterwards.

What if you are restricted from serving a full 4-year commitment? You can still transfer benefits, even if you are restricted from serving four additional years due to DOD/Service policy or by law, as long as you agree to serve for the maximum amount of time allowed by such policy or law.

To transfer your P911GIB benefit, you must have a minimum of 6 years of service to transfer to your spouse and a minimum of 10 years of service to transfer to your children.

As a military member, or your spouse, you have 15 years to use the benefit starting after you leave the Service. Children do not have the 15-year time limit, they have until age 26. The child retains the benefit even after marriage as long as the marriage occurred after the transfer. A child must be 18 years old or a high school or equivalent graduate to use the benefit.

Spouses of active duty members do not get the housing allowance. All other spouses do. All children get the housing allowance.

Once some benefit has been transferred, the ability to change or revoke the benefit amount among family members always resides with the military member. Even after separation or retirement from Service, a member can manage the benefit amounts among the family members; more, less or completely take the benefit away from someone. You just cannot add new beneficiaries after separation or retirement.

P911GIB benefits always belong to the military member even during/after a divorce. P911GIB benefits are not considered marital property or an asset of a marital estate. The benefits are not subject to division in a divorce or other civil proceeding.

Dependents you acquire after separation/retirement from the Service are not eligible for transfer benefits.

You can transfer benefit only to family members registered in DEERS. Transfer benefits before your children age out of DEERS.

Have you used some of your Montgomery GI Bill (MGIB) or other military education benefits? Be careful and get help from the VA if you plan to transfer. When you transfer your P911GIB benefit to a family member, your months of benefit available for transfer are probably going to be limited to the amount of MGIB, or other educational program, you have remaining. Find out your amount of benefit months available for transfer before you actually transfer benefits. Example:

You started with 36 months of MGIB but used 18 months of it. If you transfer P911GIB benefits to your family members, you will have only 18 months of benefit available for transfer. If you used up 36 of MGIB, you may still be eligible for 12 more months of P911GIB to transfer.

There are a lot of moving parts to the P911GIB. The VA web site is very good and has many details to help you manage your benefits. I suggest you spend some time with the site and learn just how helpful it can be. There are step by step directions on how to manage and the use the benefits. See

Places to get help include a Veteran Service Officer, the Veteran Office or Financial Aid office at the school where you intend to attend or the base education office. The P911GIB hotline number is (888) 442-4551.

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CFPB Advice: Beware Government Logos

Dec 13 2012

Just because something has a government logo on it doesn’t mean that it’s legitimate. The Consumer Financial Protection Bureau announced that it is cracking down on two mortgage loan modification operations that allegedly ripped-off struggling homeowners using websites, emails, and other advertising materials with government logos.

Mortgage assistance and foreclosure relief scams are designed to take your money. They often use mail or email designed with emblems, logos and names intended to mimic government agencies or programs, lawyers or law firms, or legitimate creditors. Unfortunately, scammers are also constantly re-inventing new ways to scam struggling homeowners.

For helpful tips on how to spot mortgage assistance scams and where to find real help, check out the posting on our page

Help CFPB reach every servicemember, veteran, and family member using social media channels by encouraging them to follow our posts on  and follow CFPB on


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A Survivor Benefit—Arming Your Spouse with Knowledge

Aug 09 2012

From your days in uniform, when the boss gave you a task, any reason the task wasn’t accomplished as expected was met by the rebuke, “No excuses!” There’s no excuse for leaving a spouse unprepared to cope with life after the death of the military spouse.

I’m sure I’m speaking to a limited audience when I state there are military members leaving behind helpless survivors. We hear from only a sampling of the survivors left in the dark. But from the stories we hear, some are surprising to say the least. I wonder, and worry about, the ones we don’t hear from.

How will your spouse survive when you are gone? What programs do they need to know about? What agencies do they need to deal with? And most importantly, what will be their sources of income?

I find it hard to believe but survivors have called MOAA trying to find sources of income. The survivor goes from plenty of income when the military member is alive to a single Social Security check after the member’s death. Please discuss how your spouse will pay the bills, buy food, and have a life after you’re gone.

There are also survivors who find out after the member’s death, the SBP won’t be 55% of full retired pay. Many find the SBP will be 55% of a fraction of the military pay because the member covered only a small portion of the military retirement check.

Here are some suggestions…

First off, your survivor will need several months’ worth of cash to pay the bills and live on after your death. It will be months before other sources of income start—the government runs on its own schedule.

Second, have your retirement orders or DD 214 readily available.


  • Go over the accounts you own. Banks, investment firms, insurance companies…
  • What programs you have with the VA. Disability compensation, life insurance, your spouse’s potential eligibility for survivor’s benefits, transferred education benefits.
  • Issues with your military retiree pay agent, like DFAS. Pay in Arrears, Survivor Benefit Plan.
  • Bills you owe, credit cards, outstanding loans, when things are due. Companies involved.
  • Contact info for lawyers, financial and insurance advisers, the VA, your military pay agent.
  • Explain Social Security and medical plans with contact information.
  • Property tax, motor vehicle issues at the local, county and state levels.
  • Military ID card office and update requirements.
  • If you worked as a federal civilian, contacts to the civilian personnel office and programs you are enrolled in.
  • Do you have a Thrift Savings Account or another pension?
  • Wills, powers of attorney, medical directives, burial details.

You get the picture. MOAA has publications to help you bring the issues together, develop a game plan and provide a written record of your situation. You can download our publications on-line from (must be logged-in to the MOAA as a member to access the pubs) or call our Member Service Center to order at (800) 234-6622.

Key publications include our Survivor’s Checklist, Burial Guide, our Personal Affairs and Estate Planning workbooks, and our ‘Help Your Survivors Now’ handbook.

You can call MOAA for guidance and appropriate contacts. If you associate with a MOAA local chapter, your spouse might even get help with some paperwork. But we don’t provide a source of income for survivors.

If it were you, wouldn’t you prefer to be armed with a plan before the grief of your spouse’s death? With information, you wouldn’t feel so helpless because you would have a handle on the situation.

No excuses.

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Beware Scam Emails That Appear To Be Sent By DFAS Employees

Apr 10 2012

Published by under Taxes,VA Benefits

Cross-posted from the MOAA Message Center blog


There are emails being sent to individuals, including military members, military retirees, and civilian employees, which appear to be sent by a DFAS employee. Although the email appears to come from a DFAS employee and displays a dot mil address it is actually from a non-government email account. This is an example of what’s called “spoofing.”

The emails indicate that individuals who are receiving disability compensation from the Department of Veterans Affairs (VA) may be able to obtain additional funds from the Internal Revenue Service (IRS). These emails are not issued by DFAS and will likely result in a financial loss if you comply with the suggestions in the email. Bottom line – do not send your personal information or copies of your tax returns and 1099s to the individual listed in the email.

The email indicates that individuals receiving VA disability compensation can receive additional funds from the IRS. The email states that such funds can be obtained by sending copies of your VA award letter, your income tax returns, your 1099-Rs, your RAS statements, and a copy of your DD 214, to a so-called retired Colonel at an address in Florida. Do NOT follow the suggestions in the email because you will be providing a significant amount of your personal information to a complete stranger, which could result in a financial loss to you.

The 1099-Rs that are issued by DFAS reflect only the taxable portion of a member’s retired pay. DFAS is not aware of any legal basis for the alleged additional funds that the IRS would supposedly pay over. By ignoring the email, you will avoid frustration, the release of personal information to a stranger, and the possibility of financial loss. If you have any questions or concerns about these or any other tax issues, you should contact a known, reputable tax consultant, tax attorney, or legal assistance officer for advice and assistance. Read our agency email policy that has been developed to protect customer privacy.

++++++++copy of text of scam email+++++++++++++

Sent: Thu, March 17, 2011 7:04:17 PM
Subject: FW: Income Tax


here you go!

I been informed that you can receive additional funds from IRS for SM who retired with 20 years of AFS, information required to receive this entitlement is as follows:

Copy of your VA award letter (note: if your VA rating has been increase within the last three years, you’ll need to send all
Copies of your 1040’s for tax years: 08, 09 and 10
Any copy of your 1009R for year 08, 09 and 10
Copies of your RAS statements (Retired pay statements) for year 08, 09 and 10
Copy of your DD Form 214

This information should be mailed by Priority Mail to:
Willie Brooks
726 Mayflower Ave.
Ft. Walton Beach, FL 32547-3175

Mr. Brooks is a retired AF COL who worked for IRS and charges you 10% of what you receive. I have known of several within the AW2 program who has received from $8.000.00 to $19,000.00. See additional information concerning this matter.

Pass this on to any of your friends who has a VA rating and 20 or more years of AFS!

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Does the Strickland Decision Apply to You? How?

Apr 05 2012

Mention VA retroactive awards for disability compensation and the Strickland decision will make its way into the conversation. The Strickland court decision provides tax-free status to past taxable military retired pay due to the award of retroactive VA disability compensation.

We get numerous calls on this issue, and based on my discussions, there are some misunderstandings we need to clear up.  The most common is that the Strickland decision will convert taxable retired pay…amounts above and beyond the tax-free status provided by VA compensation and Combat-Related Special Compensation (CRSC)…to tax-free status.

First, let me start the discussion about members who do not qualify for concurrent receipt. You fall in two camps: 1) retirees with at least 20 years of service, are VA rated at 40% or less and whose disabilities are not combat-related, or, 2) retirees less than 20 years, with any VA rating but your disabilities are not combat-related. You represent two-thirds of the retiree/VA rated population. Bad news is you don’t qualify for concurrent receipt; good news is the Strickland decision probably does you the most good.

By the way, your group is a priority for MOAA as we fight for your concurrent receipt benefits up on the Hill.

We all know that military retired pay is taxable income and VA disability compensation is tax-free. When you qualify for VA disability compensation, you have to agree to waive your retired pay by the same amount you receive in VA compensation; aka the VA Waiver. With the VA Waiver, you trade away your taxable retired pay to receive tax-free VA compensation. This is the foundation of whether you qualify to file amended tax returns to receive a tax refund.

Consider your retired pay situation had your retired pay been docked by the VA Waiver during the VA retro award period. The VA Waiver amount would have docked your taxable pay and you wouldn’t have paid taxes on the amount of income that was docked. You can file an amended tax return for those years to seek a refund for the taxes you paid on the income you wouldn’t have received.

You have to determine what the VA Waiver amount would have been in those years by backing-up the Cost Of Living Adjustments (COLAs) and/or VA rating changes.

Next, for those of you who are eligible for concurrent receipt in the form of Concurrent Retirement and Disability Pay (CRDP) or CRSC, the retroactive tax-free status of retired pay is a little more complex.

Retirees eligible for concurrent receipt are: 1) retirees with 20 or more years of service, VA rating of 50% or greater, or, 2) retirees regardless of years of service and regardless of your VA rating whose disabilities are combat-related.

For you, your past retired pay, after the application of the VA retro award of disability compensation, may or may not have been impacted by a VA Waiver. As discussed above, this is all about the amount of tax you paid on income you wouldn’t have paid if the VA Waiver had applied in the past.

CRDP restores your retired pay by getting rid of the VA Waiver. In restoring your retired pay, the restored portion of pay is taxable; like regular retired pay since CRDP is regular retired pay. CRDP is being phased-in over the years. By 2014, there won’t be a VA Waiver for you CRDP eligibles**. During the phase-in, your VA Waiver amount is getting smaller each year. To determine what your tax refund would be for past years, you have to know what your actual VA Waiver amount was after the application of CRDP in those past years. In other words, you can’t claim a refund for the full amount of your VA compensation because your past pay wasn’t docked for the full amount of the VA compensation due to CRDP.

CRSC impacts retirees in a completely different way than the CRDP crowd. CRSC reimburses you for all or some of the amount of your VA Waiver. All CRSC recipients have a VA Waiver in their retired pay for the full amount of their VA compensation. Because the CRSC rating and payment is based only on the combat-related nature of your disabilities and not total disabilities as is a VA rating, it is possible that your CRSC amount is less than your VA compensation.

Because CRSC is tax-free and the amount will not be more than the VA Waiver amount, the amount of CRSC is not relevant to the amended tax return affected by the retro payment of VA compensation. CRSC payees will use the VA Waiver amount to determine their tax refund status over the retro period. It is the VA Waiver amount that docks the retired pay thereby making the past retired pay income waived by the VA Waiver amount eligible for tax-free status. Your situation is similar to the folks above who aren’t qualified for concurrent receipt.

Now that you know what you are looking for in past pays, I’ll provide a few details on how to file amended tax returns.

To change past taxable retired pay into tax-free pay, you have to file a separate amended tax return (IRS Form 1040X) for each tax filing year in involved. You are filing to get a tax refund for the income you paid taxes on that should have been tax-free had the VA Waiver amount been applied during the retro period.

Some details about how to apply for the tax refund were discussed in a recent article on this blog by Curt Sheldon, one of our guest authors. See Curt’s article for his practical insights at

The tax code limits the time period to file amended tax returns due to the award of retroactive VA compensation to 4 years from the time of filing the taxes being amended. So a tax filing from 2008 can be amended in 2012. See IRS Publication 525 page 17 for more details (

As Curt states in his article, the burden is on you to provide the background documents to make your case when you file the amended returns. Be sure to put yourself in the shoes of the IRS official reviewing your case. Assume you know nothing about VA disability compensation, military retired pay, or retroactive VA awards. Now what paperwork would you need to convince you the amended tax return is spot on?

Best wishes. When all else fails, consult an expert tax specialist.

** Technically there could be a VA Waiver amount if your retirement pay multiplier used a greater Service disability rating rather than your years of service retired pay multiplier.

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