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Benefits Change for Grandparents Raising Fallen Soldiers' Children

Grandparents and other relatives caring for the children of deployed soldiers get some needed financial security July 1 when the U.S. military will allow soldiers to earmark a one-time, $100,000 payment to non-spousal caregivers in the event they are killed while serving the country.

The change spells relief to thousands of single parents who serve in the military and to those left to raise the soldiers' children. Nearly 16,000 single parents have been deployed since Oct. 1, 2001, according to the Department of Defense. A total of 249 of those parents have been killed.

Susan Jaenke's daughter, Jaime, was one of those fallen soldiers, killed by a roadside bomb in Iraq in 2006. "I didn't just lose my daughter," said Jaenke, of Iowa Falls, Iowa, "I lost my best friend." The soldier left her daughter Kayla, now age 11, with her grandmother. Before her deployment, Jaime Jaenke designated her daughter to receive $400,000 in group life insurance benefits at age 18 should she be killed and listed her mother as beneficiary of a so-called "death gratuity."

Upon the death of active-duty military personnel, the Department of Defense provides families with the death gratuity, a tax-exempt $100,000 payment designed to meet the immediate needs of survivors.

After her daughter's death, Susan Jaenke discovered she was not eligible for the payment. The law prevented her from receiving such benefits, even though she was designated by Jaime and was raising her daughter. The law directed the gratuity to any surviving child if there is no surviving spouse. If the child is a minor, the money is put into a trust account based on pertinent state law until age 18. "It's like you’re stealing from your granddaughter to raise her," Jaenke said.

"Caregivers who are raising these children need the support to do it," said Amy Goyer, national coordinator for the AARP Foundation's Grandparenting Program. "As a nation, we weren't quite prepared for what was going to happen to these families. We have an obligation to help them."

Jaenke and her granddaughter were living on less than $1,500 a month. "I was on the verge of losing my house," Jaenke said, "my credit was shot."

"Unfortunately, the families of these soldiers have unintentionally been excluded from important benefits intended to help them," according to U.S. Rep. Tom Latham (R-Iowa), who upon hearing Jaenke's story helped to change the law.

Change is Coming
Change has come, but it's been piecemeal. Just before Memorial Day 2007, Congress temporarily changed the law so that a solider can earmark as much as half of the death gratuity—in 10 percent increments—to a caretaker or other beneficiary. In January 2008, Congress made a permanent change, included in the recent Defense Authorization Act, which allows soldiers beginning July 1 to designate as much as 100 percent of the death gratuity to whomever they want, including caretakers. The change follows what is common practice when it comes to designating beneficiaries for life insurance.

But the change only applies to soldiers who proactively name or switch their preferred beneficiaries on the military's DD 93, or Record of Emergency Data Form. The old rules still apply to those failing to update beneficiary designations.

Family advocates have concerns about the basic education that soldiers, particularly new enlistees, receive about such benefits.

"There is an inconsistency there," noted Kathleen Moakler, government relations director of the National Military Family Association. There are several times at which the military prompts active-duty personnel to update such emergency information, including upon entry into the military and prior to deployment. "The service member should consider what [the death gratuity] is used for and who it is going to affect before deciding who the beneficiary will be."

The Defense Department says it is trying to clarify the benefits process and beneficiary elections, especially to soldiers in the pre-deployment process, who are required to update their DD 93 Forms.

"With the [new] flexibility will come responsibility" on the part of soldiers, said Gary McGee, program analyst for the compensation directorate in the Office of Military Personnel Policy. While the military says it is doing its part, ultimately, it is the service member's obligation to get it right.

For grandparents who may be in a position of caring for a grandchild whose parent is in the military, Mark Ward, the Pentagon's casualty, mortuary, and military funeral honors program manager, said, "I'd talk to my son or daughter about their elections before deployment."

Meanwhile, the changes in the law, which initially became effective in the spring of 2007, provided no relief to families when deaths occurred and funds were distributed, like the Jaenkes, prior to enactment of the new laws.

To address that, last summer, Congress passed a resolution that clarified congressional intent on death gratuity benefits distribution. The measure gave state courts—which have jurisdiction over trust accounts set up for minors—discretion to redistribute certain death gratuity funds to caretakers. This is only possible, however, in cases where a clear expression of intent for those funds was left by the service member.

As Jaime Jaenke had originally cited her mother as beneficiary of the death gratuity, the Jaenkes went back to court last summer. An Iowa judge reversed his original decision when presented with the congressional resolution and awarded the family immediate access to the full death gratuity.

"It doesn't bring my daughter back," said Susan Jaenke. "It allows me to pay the bills." The grandmother did put $25,000, per her daughter's request, toward a horse-stable business Jaime started to help disabled children.

"This is a positive step," Goyer said. It also signals that not all American families are traditional two-parent households. "There are many, many children who are being cared for by grandparents when a parent or both parents are deployed."

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