Improving Benefits for Military Dependent Survivors

December 6, 2005

By John Buhl

Proposed legislation introduced by Rep. Walter R. Jones, R-N.C., would allow beneficiaries to put military death gratuities into tax-preferred accounts.

Death gratuities are lump sum payments distributed to the survivors of servicemembers who are casualties of combat-related circumstances including armed conflict, war simulations and operations designated by the secretary of Defense.

Current tax law limits the amount of the death gratuity that can be deposited into tax-preferred accounts such as Roth IRAs and health savings and education savings accounts.

House Resolution 3478, if approved, would amend the IRS Code of 1986 and allow up to the full amount of the gratuity to be deposited into such an account.

The Military Coalition (TMC), a collection of military and veterans associations, endorsed Jones’ bill. The coalition represents more than 5.5 million members as well as their families.

In a letter to Jones, TMC wrote, “H.R. 3478’s provision to allow survivors to invest death gratuity lump sums in Roth IRAs and certain other saving accounts is a logical extension of efforts to increase protections and benefits for military widows and their families.”

Jones was approached with the idea by Marine Corps Capt. Michael Ceres. Ceres, upon returning from Operation Iraqi Freedom, suggested such a plan would ease the burden on grieving military families.

The death gratuity was increased to $100,000 with the 2005 Emergency Supplemental Appropriations Act. The increase could become permanent if passed as part of the 2006 National Defense Authorization Act.

Football Players Assist Students

Students of military families can receive free SAT and ACT test preparation software thanks to a partnership of the Department of Defense (DoD), eKnowledge LLC, and football players from the National Football League (NFL), NFL Europe, Canadian Football League and Arena Football League. This multi-million dollar sponsorship covers families in the Army, Navy, Marine Corps, Air Force and Coast Guard for the 2005-2006 school year. Family members of National Guard members, reservists and retired personnel are also eligible. Military families purchasing the material have the $199 fee waived; they only have to pay the shipping and handling costs. The material comes with a one-year license. Servicemembers can request multiple copies of the program as needed to supply one to each applicable dependent. DoD has set up the following Web site to verify military status and start the ordering process: www.militaryhomefront.dod.mil/.