Washington, D.C. – Congressman Aaron Schock introduced a bipartisan-backed measure aimed at extending the time period for surviving military spouses to designate a portion of their benefits to Roth IRAs and Coverdell education savings accounts. He was joined by three original co-sponsors: Rep. Kristi Noem (R-SD); Rep. Earl Blumenauer (D-Ore.); and Rep. Niki Tsongas (D- Mass.).
“Every year, thousands of Americans face the loss of an active duty or national guard family member. Ensuring the financial well-being of their surviving spouses and children is a top priority of the United States government. Under current law, however, we do not allow these families adequate time to make important decisions about how to plan for life without their loved one. That’s why I’ve introduced H.R. 4559 – to offer these families the time they need to grieve without feeling rushed to make decisions about how to best allocate their survivor payments,” Rep. Schock said of his bill.
“This bipartisan, commonsense legislation deserves urgent consideration by Congress, and I will work with my colleagues to facilitate quick committee action and a floor vote before the end of this year.”
The bill, H.R. 4559, will extend from one to three years the time that a beneficiary of a military gratuity payment will have to decide what portion he/she wishes to contribute to a nontaxable individual retirement account or an education savings account for surviving children. Since 2008, military survivors have had the option to invest these payments into select retirement and education savings accounts, bypassing the usual limits set by current tax law. For many military families, this can be a very significant step toward providing for retirement or a child’s education.
According to reports from the Army Survivor Outreach Service, approximately 25 percent of Army survivors are not ready to make significant financial decisions during the first year after the loss of a service family member.
The Schock bill, therefore, recognizes that many families are not yet ready to make these important financial decisions and extends the time period to three years. By correcting this inadequacy in the tax code, H.R. 4559 will provide greater support for military families and relieve surviving spouses from making significant financial decisions under pressure of a truncated federal time limit.
The bill was referred to the House Committee on Ways and Means, where Rep. Schock is a Member.
The bill is supported by numerous military and veterans advocacy groups, including the Military Coalition. Kathleen Moakler, Survivor Program’s Chairman for the Military Coalition offered the following endorsement of H.R. 4559:
“Extending the time period during which this can be done from 1 year to 3 years will be a great help to surviving spouses, parents and children. Often, surviving family members are not able to make quick financial decisions in those first months after the loss of a loved one. This extension will help them in creating a strong financial plan for their future. The Military Coalition supports H.R. 4559 and pledges its full support for enactment this year.”
Other groups supporting the measure are:
National Military Family Association, US Army, Gold Star Wives, Gold Star Mothers, Air Force Association, Military Officers Assn. of America, Air Force Sergeants Association (AFSA), Military Order of the Purple Heart, Air Force Women Officers Associated, National Association for Uniformed Services, AMVETS, National Guard Assn. of the US, Army Aviation Assn. of America, Assn. of Military Surgeons of the United States, Naval Enlisted Reserve Assn., Assn. of the US Army, Non Commissioned Officers Assn. of the United States of America, Association of the United States Navy, Reserve Enlisted Assn. of the US, Commissioned Officers Assn. of the US Public Health Service, Inc., Reserve Officers Assn., CWOA US Coast Guard, Society of Medical Consultants to the Armed Forces, The Military Chaplains Assn. of the USA, Fleet Reserve Assn., The Retired Enlisted Assn., USCG Chief Petty Officers Assn., Iraq and Afghanistan Veterans of America, US Army Warrant Officers Assn., Jewish War Veterans of the USA, Veterans of Foreign Wars of the US, Marine Corps League, Vietnam Veterans of America, Marine Corps Reserve Association.