100% Disabled Veteran Tax Exclusion
 

The NC legislature has passed a law providing for a $45,000 property Tax Exclusion for thos veterans retired on 100% service-connected disability.  The benefit is also available to widow/widower of a deceased veteran who was 100% disabled at time of death.  The form to be used is at this link: Property Tax Exclusion
 

Final COLA Announced

It's official. The 2009 cost-of-living adjustment (COLA) for military retired pay, SBP annuities, Social Security checks, and VA disability and survivor benefits will be 5.8%, effective December 1, 2008. It will first appear in the January checks.

Partial COLA for 2008 Retirees:

Servicemembers who retired during calendar year 2008 will receive a somewhat smaller, partial COLA for this year only, because they already received a January military pay raise (which also raised their 2008 retired pay). If you retired in 2008, your COLA is calculated as follows:

• Members who entered service before Sept. 8, 1980, and who retired on or after Jan. 1, 2008, will receive a 5.0% COLA.
  
• Members who entered service on or after Sept. 8, 1980 (whose retired pay is calculated on their highest 36 months' basic pay rather than final basic pay), and retired between Jan. 1, 2008, and Sept. 30, 2008, will receive a partial COLA based on the calendar quarter in which they retired. Jan.-Mar. retirees will receive 5.0%; Apr.-Jun. retirees, 3.8%; and Jul.-Sept. retirees 1.2%. Those who retire after Oct. 1, 2008, will see no COLA this year.
  
• Members retired during 2008 will receive full-year COLAs in future years.

This is the third year in the last four that the retiree COLA has been higher than the pay raise for currently serving troops. The two are never the same because they are based on different things and have different purposes.

Military pay raises are based on private sector pay growth, as measured by the Bureau of Labor Statistics' Employment Cost Index (ECI). Their intent is to ensure military pay is kept reasonably comparable to private sector pay, to allow the services to compete successfully for manpower over time.

Retired pay COLAs, on the other hand, are cost-of-living adjustments that track to inflation, as measured by the Consumer Price Index (CPI). Their purpose is to ensure that whatever purchasing power a member’s retired pay represented on the date he or she left service isn’t eroded by inflation over time.

Over time, the two tend to even out. During the 1970s, COLAs were higher in 5 years and pay raises won out for the other five. In the ‘80s, pay raises beat COLAs (6 – 4); in the ‘90s, it was 50-50 split (5 – 5). The first half of this decade, pay raises were higher, but with COLAs higher for three of the last 4 years, the pendulum seems to be swinging the other way.