Some injuries change a life in an instant. Others reveal their toll slowly, across years of physical pain and bureaucratic battles.

For thousands of medically retired veterans with combat-related injuries, the challenges don’t end with discharge. Many discover, often to their shock, that their military retirement pay is reduced by the exact amount of their VA disability compensation.

This policy, known by many as the “Wounded Veterans Tax,” affects those forced to leave the service early due to injury.And it’s costing them far more than dollars.

Medically retired veterans with combat injuries lose earned retirement pay.

One Policy, Two Agencies, Double the Burden

At the heart of the issue is a government policy that treats military retirement and disability compensation as mutually exclusive. Because retirement pay comes from the Department of Defense and disability compensation from the Department of Veterans Affairs, federal law blocks concurrent receipt for many medically retired service members—especially those with fewer than 20 years of service or a disability rating below 50%.

These veterans are effectively punished for getting wounded. Each month, an average of $1,200 disappears from their retirement checks due to this offset, according to The Washington Times.

The Wounded Veterans Tax penalizes those wounded before 20 years of service.

The Major Richard Star Act: A Targeted Fix

The Major Richard Star Act seeks to correct this long-standing inequity by allowing concurrent receipt of retirement and disability benefits for medically retired veterans with combat-related injuries, the National Guard Association reports. The bill, named for a combat veteran who succumbed to service-related cancer, has drawn widespread bipartisan support in both chambers of Congress.

Despite its backing—over 270 co-sponsors in the House and more than 70 in the Senate—the legislation has faced budget-related delays. In 2022, the Congressional Budget Office estimated the cost at $9.75 billion over ten years. But that represents less than one-tenth of one percent of the annual defense budget, which is expected to exceed $1 trillion.

VA disability compensation offsets DoD retirement pay dollar for dollar.

Veterans Left Behind

The current offset policy excludes a large swath of veterans—those who suffered devastating injuries but didn’t reach the 20-year threshold for retirement. Many were forced out by medical boards long before they intended to leave. Advocates argue that denying them full benefits is not only unfair, but deeply damaging.

Some veterans have spoken publicly about the financial hardship caused by the policy. The loss of hundreds of dollars each month can mean deferring medical care, skipping meals, or sacrificing family essentials, NBC News reports. It’s not about luxury—it's about stability and dignity.

Beyond the Visible Injuries

Not all wounds are seen. Research has increasingly shown that exposure to blast waves—especially from improvised explosive devices—can leave microscopic damage in the brain that doesn’t show up in standard scans, according to CBS News. Neuropathologists have identified scar patterns in veterans who later died by suicide, even in cases where traditional brain trauma wasn’t detected while they were alive.

Advocates argue that policies must evolve to reflect not just the physical toll of war, but its invisible wounds as well.

Over 50,000 veterans are impacted by this unjust policy.

It’s Time to Deliver

The Major Richard Star Act continues to gain momentum. With bipartisan support and pressure from every major veterans service organization, lawmakers are being called to act—not in the abstract, but on behalf of tens of thousands of veterans who live with the consequences of war and an outdated policy every single day.

Those who served and suffered for this country should not be asked to sacrifice again. The Major Richard Star Act won’t erase their injuries, but it could help restore something they’ve gone without for too long—basic fairness.

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