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Legislation to give DOD greater flexibility in pay recoupment schedules passes the Senate, heads to the President’s desk

(Washington, D.C.) - U.S. Senator Jeanne Shaheen today succeeded in passing legislation to prevent unnecessary financial hardship for veterans as part of the Supplemental Appropriations Bill, which now heads to President Obama to be signed into law. The legislation is a major victory for veterans in New Hampshire and across the nation, as well as our active service members currently fighting overseas, as it will protect them from an unnecessarily harsh pay recoupment that could threaten their ability to pay their mortgages or cover their bills. The legislation was prompted by retired Air Force Sergeant Wayne Merritt of Dover, New Hampshire who lost over half his monthly retirement pension in April due to the unfair repayment formula and faced losing his home because of the decreased pay.

"This is a win for Sergeant Wayne Merritt and a win for veterans in New Hampshire and across the nation, and I'm proud my colleagues and I stood up for the veterans who have stood up for us," said Shaheen. "Many veterans are facing unnecessary financial hardship, and many of our troops fighting today in Iraq and Afghanistan could face this same problem when they return. I urge President Obama to sign this bill into law without delay."

"Like a lot of military retirees, I rely heavily on my pension to pay my mortgage and other bills," said Sergeant Wayne Merritt. "Losing half of that pension each month would have made it extremely difficult to cover my mortgage, and I had great concern my family and I would not be able to stay in our home as a result. This legislation will help me and over a thousand other military retirees facing similar circumstances, especially during these already difficult economic times. I'm extremely grateful to Senator Shaheen and Congresswoman Shea-Porter for having authored this legislation. I also thank Senator Gregg and Congressman Hodes for cosponsoring the legislation." 

When members of the military accept a separation benefit for early retirement but later reenlist and qualify for a pension, the U.S. Department of Defense (DOD) is statutorily bound by a rigid formula to recoup the separation benefit by deducting a portion of their pension. After learning of the hardship this rigid formula had caused Sergeant Merritt, Shaheen began working with the DOD to craft a legislative solution that would allow the DOD to consider financial hardship when determining a repayment schedule. Senator Gregg cosponsored the legislation, and Congresswoman Shea-Porter introduced companion legislation that was cosponsored by Congressman Hodes in the House.

Shaheen set the legislation on a fast track to passage when she succeeded in adding it to the Supplemental Appropriations bill that passed the Senate on May 21. The Supplemental then went to a joint Senate-House conference committee to reconcile the two versions of the bill, where Shaheen and Gregg fought to ensure the legislation remained in the final version of the bill. Today the legislation passed the Senate by a vote of 91-5 and is on its way to President Obama for his signature.