Bill to eliminate offsets for combat-disabled retirees gains support
Defense Secretary Pete Hegseth publicly endorsed the Major Richard Star Act during a congressional hearing Thursday on the Defense Department's fiscal 2027 budget request, adding high-level executive support to legislation that would eliminate benefit offsets for approximately 54,000 combat-disabled military retirees. When questioned by Senator Richard Blumenthal of Connecticut, a lead sponsor of the bill, Hegseth stated clearly that he supports the legislation, which would allow eligible veterans to receive both their military retirement pay and VA disability compensation concurrently without reduction.
The issue at the heart of this legislation is a longstanding offset that affects veterans who retired early from military service due to combat-related injuries or illnesses. Since 2004, veterans who served at least 20 years and qualify for VA disability benefits receive full pay for both retirement and disability if they have a rating of at least 50 percent. However, those who medically retired before reaching 20 years of service face dollar-for-dollar offsets between their military disability retirement and VA disability benefits, sometimes losing thousands of dollars annually despite their combat-related injuries.
The Major Richard Star Act specifically targets veterans who medically retired due to combat-related conditions and are eligible for Combat Related Special Compensation. This narrower scope is critical to understanding the bill's actual impact and cost. The legislation would affect roughly 54,000 veterans who fall into this category, not the broader population of 250,000 military medical retirees who face various types of offsets.
Cost has been the primary obstacle preventing passage despite overwhelming bipartisan support. The bill currently has backing from 79 senators and 323 House members, yet Senator Ron Johnson of Wisconsin blocked a floor vote in March, citing concerns about a $70 billion price tag over ten years. That figure, however, represents the cost of eliminating offsets for all 250,000 military medical retirees. According to the Senate Veterans Affairs Committee, the Major Richard Star Act would actually cost $11 billion over ten years because it applies only to the smaller group eligible for Combat Related Special Compensation. Under current congressional rules, lawmakers must identify funding sources for this cost, and the Veterans of Foreign Wars has proposed using the federal Military Retirement Fund, which holds more than $1.7 trillion in assets.
The legislation honors Army Reserve Major Richard Star, who died in 2021 from lung cancer after burn pit exposure in Iraq and Afghanistan. Major veterans organizations including the Veterans of Foreign Wars and Disabled American Veterans have made this bill a top priority, recognizing that combat-disabled retirees should not face financial penalties for injuries sustained in service to their country. Senator Blumenthal has characterized the offset as a "wounded warrior tax" and repeatedly pushed for passage.
For disabled veterans who medically retired before completing 20 years of service due to combat-related conditions, this legislation represents potentially significant financial relief. The difference between offset and concurrent receipt can amount to thousands of dollars annually, money that many combat-injured veterans have been denied despite their service-connected disabilities. While the bill has not yet passed, the combination of Defense Secretary support, strong congressional backing, and sustained advocacy from major veterans organizations suggests momentum may be building.
Veterans affected by this offset should connect with their veterans service organization representatives to understand their potential eligibility and stay informed about the bill's progress. Those who believe they would qualify under Combat Related Special Compensation criteria should ensure their VA disability claims accurately reflect the combat-related nature of their conditions and maintain documentation of their medical retirement circumstances, positioning themselves to benefit quickly if the legislation ultimately passes.