This Act may be cited as the “Retired Pay Restoration Act”.

(a) Findings.—Congress finds the following:

(1) For more than 100 years before 1999, all disabled military retirees were required to fund their own veterans’ disability compensation by forfeiting one dollar of earned retired pay for each dollar received in veterans’ disability compensation.

(2) Since 1999, Congress has enacted legislation to progressively expand eligibility criteria for relief of the retired pay disability offset and reduce the burden of financial sacrifice on disabled military retirees.

(3) Absent adequate funding to eliminate the sacrifice for all disabled retirees, Congress has given initial priority to easing financial inequities for the most severely disabled and for combat-disabled retirees.

(4) In the interest of maximizing eligibility within cost constraints, Congress effectively has authorized full concurrent receipt for all qualifying retirees with 100-percent disability ratings and all qualifying retirees with combat-related disability ratings, while phasing out the disability offset to retired pay over 10 years for retired members with noncombat-related, service-connected disability ratings of 50 percent to 90 percent.

(5) In pursuing these good-faith efforts, Congress acknowledges the regrettable necessity of creating new thresholds of eligibility that understandably are disappointing to disabled retirees who fall short of meeting those new thresholds.

(6) Congress is not content with the status quo.

(b) Sense of Congress.—It is the sense of Congress that military retired pay earned by service and sacrifice in defending the United States should not be reduced because a military retiree is also eligible for veterans’ disability compensation awarded for service-connected disability.

(a) Extension of Concurrent Receipt Authority to Retirees With Service-Connected Disabilities Rated Less Than 50 Percent.—Section 1414(a) of title 10, United States Code, is amended—

(1) by striking “Compensation” in the subsection heading and all that follows through “Subject” and inserting “Compensation.—Subject”; and

(2) by striking paragraph (2).

(b) Amendments To reflect conclusion of Phase-In of Concurrent Receipt of Retired Pay and Veterans’ Disability Compensation.—Section 1414 of title 10, United States Code, is further amended—

(1) in subsection (a), as amended by subsection (a) of this section, by striking the final sentence;

(2) by striking subsection (c) and redesignating subsections (d) and (e) as subsections (c) and (d), respectively; and

(3) in subsection (d), as so redesignated, by striking paragraphs (3) and (4).

(c) Specification of qualified retirees for concurrent receipt purposes.—Section 1414 of title 10, United States Code, is further amended—

(1) in subsection (a), as amended by subsections (a) and (b)—

(A) by striking “a member or” and all that follows through “is entitled” and inserting “an individual who is a qualified retiree for any month is entitled”; and

(B) by inserting “retired pay and veterans’ disability compensation” after “both”;

(2) in subsection (b)—

(A) by striking “Special Rules” in the subsection heading and all that follows through “is subject to” and inserting “Special Rules for Chapter 61 Disability Retirees.—In the case of a qualified retiree who is retired under chapter 61 of this title, the retired pay of the member is subject to”; and

(B) by striking paragraph (2); and

(3) in subsection (d), as redesignated and amended by subsection (b), by adding at the end the following new paragraph:

“(3) QUALIFIED RETIREE.—The term ‘qualified retiree’ means a member or former member of the uniformed services who, with respect to any month—

“(A) is entitled to retired pay, other than in the case of a member retired under chapter 61 of this title with less than 20 years of service creditable under section 1405 of this title and less than 20 years of service computed under section 12732 of this title; and

“(B) is entitled to veterans’ disability compensation.”.

(d) Clerical Amendments.—

(1) SECTION HEADING.—The heading of section 1414 of title 10, United States Code, is amended to read as follows:

(2) TABLE OF SECTIONS.—The item relating to such section in the table of sections at the beginning of chapter 71 of title 10, United States Code, is amended to read as follows:

“1414. Members eligible for retired pay who are also eligible for veterans’ disability compensation: Concurrent payment of retired pay and disability compensation.”.

(e) Conforming amendment.—Section 1413a(f) of title 10, United States Code, is amended by striking “Subsection (d)” and inserting “Subsection (c)”.

(f) Effective Date.—The amendments made by this section shall take effect as of January 1, 2021, and shall apply to payments for months beginning on or after that date.