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Pacific edition, Saturday, August 25, 2007

The Bush administration is preparing a legislative proposal to present to Congress in September that would establish a separate and, under most circumstances, a more generous disability package for servicemembers injured in war or while training for war, sources said.

Under the plan, recommended by the Dole-Shalala commission, servicemembers found unfit for duty as a result of combat or combat-training injuries, regardless of the number of years served, would qualify for an immediate lifetime annuity from the Department of Defense.

Annuity amounts would be based on the formula used to calculate regular retired pay: 2.5 percent of basic pay multiplied by years in service. A wounded warrior with two years of service thus would get 5 percent of basic pay. Likewise, a servicemember injured in combat training who had served 10 years when found unfit would get 25 percent of basic pay.

These members also would get lifetime Tricare, the military health and pharmacy plan. Separately, they would get their disability compensation from the Department of Veterans Affairs for any and all service-connected injuries or ailments. VA compensation likely would be raised under the plan to include a quality-of-life allowance. But the portion of VA compensation now provided, and intended only to cover reduced earnings capacity, would stop at age 65 when Social Security begins.

The legislation is being drafted by DOD and VA officials and they continue to work out details. One issue outstanding is whether the changes should be applied retroactively, perhaps to all combat-related disabled members injured since the attacks of 9/11.

But the Bush administration has decided that these disability pay changes should apply only to members with injuries from combat or combat training. That, officials say, adheres to the theme of Dole-Shalala, also known as the President’s Commission on Care of America’s Returning Wounded Warriors. Because the commission’s charter focused solely on the needs of combat-wounded veterans, its recommendations do, too.

Under the White House plan, noncombat-disabled members still would come under current service disability retirement, with percentage awards based only on conditions that make the individual unfit for service. Noncombat-disabled members rated below 30 percent still would get a lump-sum severance payment instead of an annuity and would not qualify for Tricare.

This point is expected to be vigorously opposed by advocates for disabled members. Though they generally are excited about the changes planned for combat-related injuries, advocates see stark inequities in having separate disability packages, one for wounded warriors and one for members with other service-connected injuries or ailments.

The White House position also seems to be in conflict with a principle of the Veterans’ Disability Benefits Commission, which will complete its two-year comprehensive study of disability benefits in October. That commission already has voted not to treat disability benefits differently based on whether an injury is received in combat, advocates point out.

One administration official brought another warning. If the VA-portion of disability compensation is not boosted as much as envisioned by Dole-Shalala, then certain disabled warriors actually might receive less in overall disability pay than noncombat-disabled peers with equal rated conditions.

Though advocates for disabled veterans see the Dole-Shalala disability pay reforms as overwhelmingly positive for servicemembers — the reason they want Congress to apply the changes to all members being separated as physically or mentally unfit — there are anomalies to be addressed, they said.

For example, an E-4 with four years’ service and a 30 percent rated a disability that leaves him unfit for duty would get service disability retirement today of $546.07 a month. Under Dole-Shalala, if VA compensation remains at current levels, with no qualify-of-life allowance, the same E-4 injured in war would receive longevity retirement of $182.02 a month for his four years of service plus VA compensation of $348. The total of $530.02 a month would be $16 less than awarded to the noncombat-disabled member.

Even in this case, however, VA compensation of $348 a month is only for the “unfitting” condition. The VA typically will base compensation for any disabled veteran an average of 20 percent higher than the rating used for service retirement because the VA considers all service-connected conditions, not just those that make the member unfit for continued service.

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