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The Proposed DUSL Act1
Section 1. Short Title
Designates the Act as the "Divestment of Unavailable Savings to Live Act" or the "DUSL Act."
Section 2. Purpose
The DUSL Act would provide financial relief for severely disabled veterans (100% VA disability rating or TDIU) and, in some cases, their spouses by allowing penalty-free, tax- free access to retirement accounts without affecting means-tested benefits.
Section 3. Findings
Severely disabled veterans experience significant financial burdens resulting from substantial medical expenses, diminished earning capacity, and severely reduced life expectancy2. Existing tax and penalty structures on retirement account withdrawals impose additional and undue hardship. This Act seeks to provide necessary financial flexibility by allowing access to retirement funds without penalty, thereby enhancing financial security and ensuring a higher quality of life during end-of-life care.
Section 4. Definitions
- Eligible Veteran -- 100% VA disability or TDIU.
- Eligible Spouse -- As defined in 38 CFR § 3.50 and meeting the marriage requirements of § 3.1(j), legally married to the veteran for at least 2 years prior to disbursement.
- Retirement Accounts -- Includes IRAs, 401(k)s, 403(b)s, Thrift Savings Plans, and similar federally recognized accounts.
Section 5. Access to Funds
- Notwithstanding any other provision of law, Eligible Veterans and, where applicable, Eligible Spouses may withdraw funds from Retirement Accounts without incurring early withdrawal penalties or federal income tax liability.
- Such withdrawals shall be disregarded as income and assets for purposes of determining eligibility for means-tested federal or state benefit programs, including but not limited to VA pensions and Medicaid.
Section 6. Limitations
- Annual Cap: $180,000 per year, increasing with Social Security COLA’s annually.
- Surviving Spouse: May access funds after the veteran’s death until their death or funds are exhausted.
Section 7. Effective Date
January of the calendar year following enactment.
Section 8. Conclusion
The DUSL Act enables severely disabled veterans and their spouses to access retirement funds safely, improving financial stability and quality of life.
[1] The proposed language will probably change to be in accordance with the laws and requirements to pass the house and senate. The overall idea shall remain the same.
Rationale for the DUSL Act
Veterans' injuries are not always seen. Sometimes the injury doesn't present itself for many years later. It is hard enough to navigate the VA system let alone maintain employment when your service-connected disability interferes with your ability to live life. What if your service-connected disability was terminal but not immediate? Would you like to spend more time with your family to make lasting memories, take a dream vacation or do some renovations to your home to make life a little easier? Many of the life-threatening illness for Vets don't show up until later in life because of exposures to burn pits or other toxins. You worked hard all your life and have saved up money for retirement to find out you may never live to enjoy the fruits of your labor. What if you were granted access to your retirement savings without penalty or tax repercussions to be able to enjoy the remaining days GOD gives you. What if your spouse needs that additional income after your passing to help with your kids and or their expenses?
This is the purpose of the DUSL Act. To allow Service-Disabled Veterans and their spouses to access their own money to live. Please share your story below to show your support in allowing the DUSL Act to be heard and passed by congress.