The new authorization act grants relief to Survivor Benefit Plan
annuitants from the “military widows tax,” so named because most
survivors of military retirees “taxed” are widows. Under a
decades-old law, survivors at age 62 underwent a slash in their
SBP annuities from 55 percent to 35 percent of the spouse’s
designated base amount. Under the new legislation, the tax will
be phased out over 3.5 years and will be eliminated by 2008. The
act will raise the minimum SBP annuity to 40 percent of the base
amount on Oct 1, 2005; to 45 percent of retired pay on April 1,
2006; to 50 percent on April 1, 2007; and to 55 percent on April
1, 2008. “We’re grateful that Congress did the right thing in
ending a very unfair tax on military widows,” said VAdm. Norb
Ryan, Jr., President of the Military Officers Association of
America.
