The Post-9/11 GI Bill is one of the most valuable veterans benefits. Being able to transfer your GI Bill to your spouse or children makes it even more valuable. But there are some changes on the horizon that might impact how much those benefits will be worth if you do transfer them.
Here is the main takeaway from this article: If you are able to transfer your Post-9/11 GI Bill benefits, do it now.
OK, now let’s talk about the why.
The Post-9/11 GI Bill was Created as a Retention Tool
The Post-9/11 GI Bill was designed as a retention tool for military members in the early years of the post-9/11 era. When it was created, the military was struggling to maintain its end strength. The new GI Bill was a carrot dangled in front of troops—serve a few more years, and you will be eligible for an enormously valuable benefit.
In 2009, the deal became even sweeter. Servicemembers were able to transfer their Post-9/11 GI Bill benefits to their spouse or children in exchange for agreeing to serve more time on active duty. This was unprecedented, as virtually no other veterans benefits are transferable to the spouse and children (with the exception of some benefits that transfer posthumously).
Retention is not a problem now. And Congress is looking for ways to cut costs. And this may impact the value of the benefit you transfer, unless you have already done it, or you do it soon.
Post-9/11 GI Bill Transfer Rules
When servicemembers became eligible to transfer their Post-9/11 GI Bill benefits, they had to meet certain requirements:
- At least 6 years of service on date of GI Bill transfer request, and they must agree to serve at least 4 more years.
- Have at least 10 years service and cannot serve 4 more years because of policy or law, but you agree to serve as long as you are able by law or policy (high year tenure rules or involuntary are two reasons why someone may not be able to serve the full 4 years).
- Are retirement eligible from August 1, 2009 through August 1, 2012. (Member must sign up for one more year of service starting from the date the GI Bill benefits are transferred).
Important note: All transfer requests must be submitted and approved while the member is still in the military. Transfers cannot be initiated after retirement, or separation.
Eligible benefits recipients:
- Spouses, who are eligible to use the benefit immediately, or up to 15 years after the member separates from the armed forces. Spouses are not eligible to receive the Monthly Housing Allowance (MHA) or book stipend while the service member is on active duty (BAH covers the MHA).
- Children, who are eligible to use the benefit after the service member completes at least 10 years of service, provided they have earned a high school diploma or equivalent, or reached age 18. Children are eligible to receive the MHA and book stipend if their sponsor is still on active duty.
The Housing Allowance for Children is Under Fire
The Monthly Housing Allowance is generous. It pays the same rate as the BAH for E-5 with dependents. Depending on where you live, this can range from around $700 – $3,000 per month. In some cases the BAH rate is substantially higher than the cost of room and board through local universities. The MHA is intended to give veterans a decent standard of living while attending school. But the benefit also transfers to dependents.
Legislation has been proposed that will cut the MHA by 50% for future Post-9/11 GI Bill transfers to children. This change will not apply to those who have already transferred benefits. Additionally, members will have up to 180 days after the bill passes to be grandfathered into the current system. This change will also only affect the housing allowance, not the amount of the GI Bill benefit itself.
Spouses will continue to receive the full MHA rate going forward.
Transfer Benefits Now – You Have Nothing to Lose!
The best part about transferring benefits (other than blessing your dependents with a free education) is that the transfer is non-binding. You can transfer your benefits to your dependents today, then later decide to decrease or even rescind those benefits.
When you transfer benefits you can transfer a minimum of one month to each eligible dependent (the dependent must be in the DEERS system to be eligible to receive transferred GI Bill benefits). You can later change your allocation of benefits at any time.
Simply log in to your MilConnect account and update the number of months you are transferring to each individual (up to the maximum allowed). This can be found under:
- MilConnect Home –> Benefits –> Transfer of Education Benefits
I strongly recommend anyone eligible to transfer benefits do so.
My Thoughts on this Change
I understand where Congress is coming from on this topic. The benefit was designed for servicemembers. The fact that it was extended to family members is pretty much unprecedented in the land of veterans benefits. But as times change, it also makes sense to reevaluate programs. The good news is people who have already transferred their benefits will be grandfathered into the current system (and up to 180 days after the bill passes). So there is time for most people to take action if they are already eligible.
More discussion around this topic:
What do you think about this proposed change?