Stop-loss vets eligible for payment

By Tom Philpott: CNJ columnist

About 185,000 veterans who were forced by wartime “stop loss” orders to serve on active duty after enlistment contracts had expired, or past their approved retirement dates, are due a retroactive special payment of $500 for each extra month they served.

But these veterans must apply by Oct. 21 to get the extra money set aside in appreciation for the extra time they had to serve. Payments could total $640 million.

Through December, only about 15,000 veterans and current members had applied for “Retroactive Stop Loss Special Pay.” The average lump sum payment made to eligible Army veterans so far is $4500, said Army spokeswoman Jill Mueller. That suggests an average stop-loss period of nine months, considerably longer than was needed by any other service.

The universe of veterans eligible for retroactive stop loss pay was narrowed Dec. 19, 2009, by as much as 10 percent. On that date, at the Army’s urging, Congress ended eligibility for retroactive stop loss pay for veterans who, while in stop-loss status, had re-enlisted or extended their service obligation voluntarily and received a re-enlistment or extension bonus.

Army officials had advised that some soldiers with deployment orders in hand intentionally delayed re-enlistment while stateside because bonuses paid there are taxed. Knowing they would be deployed anyway under a stop loss order to preserve unit readiness, these soldiers waited to re-enlistment because bonuses earned in a combat area are exempt from federal taxes.

The Army told Congress last spring that these soldiers shouldn’t be eligible for the retroactive stop loss payment nearing congressional approval. But language to limit payments this way was left out of the Fiscal Year 2009 War Supplemental Appropriations Act in June. As of Oct. 21, the services began processing retroactive stop loss payment applications.

Congress corrected the oversight in the appropriations bill signed last month, but not before at least a few hundred veteran soldiers and some airman who had re-enlisted while in stop loss status got retroactive stop loss pay. Marine Corps and Navy officials had anticipated the change in law and, by policy, never allowed retroactive payments to go to members who had re-enlisted or extended their service obligations while under stop loss.

The Army and Air Force had suspended processing retroactive stop loss pay applications from Dec. 19 until Jan. 5 when Defense officials verified the policy change with revised rules. They will not recoup any payments already made. But Retherford said the narrowing of eligibility was justified.

Army is the only service that still uses stop loss. As of Dec. 1, about 8700 soldiers were serving in stop loss status, derisively referred to as a “back door” draft. The stop loss breakdown was 4723 active duty soldiers, 3694 Army National Guard members and 279 Army Reserve personnel.

Starting this month, the Army no longer expects to have to deploy units using stop loss orders. Army Reserve and Guard units began mobilizing without stop loss last August and September. The last units with stop-loss soldiers should return from combat theaters in 2011.

Service officials are urging former stop loss veterans to file claims and readers of this column should help spread the word. Marine Corps spokeswoman Maj. Shawn Haney said the Corps has written to former stop-loss Marines at their last known address but could use help reaching others.