Scheduled Pension Reductions on January 1, 1978

A prospective pension reduction faces a majority of our veterans and surviving spouses.

Most pensioners are elderly-and the most common source_of income available to them is social security (Old Age Survivors Insurance). About 75 percent of all pensioners have some income from social security. The following table shows the number of non-serviceconnected pensioners and DIC parents receiving social security benefits broken down by age grouping and average benefit:

96-189 O-77 - 26

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TABLE 6.-NON-SERVICE-CONNECTED PENSIONERS AND DIC PARENTS WITH SOCIAL SECURITY (OLD AGE SURVIVORS INSURANCE), JUNE 1977

The folowing table shows the numbers of non-service-connected pensioners and DIC parents whose benefits were terminated, reduced, or increased (or which remained unchanged) following the Annual Income Questionnaire (required of all recipients) in December 1976, and the pension redeterminations made in January 1977, through June 1977:

TABLE 7.-INCOME ADJUSTMENTS ALL PENSION AND DIC PARENTS, JUNE 1977

Solely because of the 5.9-percent cost-of-living increases in social security benefits in July 1977, approximately 47.5 percent of all current law pensioners are scheduled to sustain annual pension reductions averaging $91.0 if no rate increase is enacted. Another 18,040 veterans and survivors will be dropped from the pension rolls altogether.

Pension Increases Effective January 1, 1978

As a result of changes in the Consumer Price Index and because of the large number of veterans and survivors who will sustain pension reductions on January 1, 1978, the bill provides for adjustments in the current program effective January 1, 1978.

A 6.5-percent increase in the rates payable and a comparable increase in the maximum annual income limitations are provided for veterans and survivors in the current program.

Similarly, maximum annual income limitations for the "old law" pensioners are increased by $200 and $300, respectively, for a veteran or surviving spouse without dependents and a veteran or surviving spouse with one or more dependents. A 6.5-percent increase in rates and in the annual income limitations are authorized also for needy parents receiving dependency and indemnity compensation. Finally, aid and attendance allowances for certain recipients of wartime death compensation are increased by 6.5 percent.

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Thus, under the current program the maximum rate for a veteran without dependents would be increased from $185 to $197 a month, while the rate for a veteran with a dependent would be increased from $199 to $212. The following tables show the rates currently payable and those proposed:

TABLE 8.-CURRENT RATES AND THOSE PROPOSED BY H.R. 7345 AS AMENDED

1 Veterans housebound allowance increased from $57 to $61 per month and aid and attendance increased from $155 to $165.

According to information supplied by the Veterans' Administration, if the adjustments contained in this measure are enacted, none of the 18,040 veterans or survivors currently scheduled to be terminated because of social security increases will be dropped. Further, 1,718,850 veterans, surviving spouses and dependents can expect to receive an average annual gain in pension of approximately $95.

And although no veteran or survivor will sustain a loss in aggregate income, solely as a result of social security increases, it should be acknowledged that even if provisions contained in titles I and II are enacted, 62,575 veterans and survivors will sustain an average annual reduction of $2 in pension despite such adjustments. The following table shows the projected gains and losses with respect to the current pension population if H.R. 7345 is enacted into law (NOTE: The figures shown in this table are based on a 6.7-percent increase rather than a 6.5-percent increase. However, any variations in figures based on a 6.5-percent increase can be expected to be very slight):