Being part of the Armed Forces is not only an honor but also a big responsibility. The service members must be able to perform their duties to the best of their abilities. This is why the active duty service members are granted many benefits and protections. Among the laws that protect military personnel is the Servicemembers Civil Relief Act (SCRA).
The SCRA mandates legal and financial protections for military members on active duty service. This law extends to National Guard and Reserve members. Formerly known as the Soldiers’ and Sailors’ Civil Relief Act, this federal law was adopted in 2003. As a result, more military personnel have been able to devote their energy and focus on their jobs.
In a nutshell, SCRA protections include an interest rate reduction to a maximum of 6%, the ability to terminate a lease agreement without penalties, protection from eviction, protection from foreclosure proceedings, termination of automobile lease agreements, and tax benefits.
The SCRA has been recently updated to enhance the benefits of people rendering military service. But what are these enhanced SCRA protections, and who mandates them? This article will explore this and more.
- 1 What Is the Servicemembers Civil Relief Act (SCRA)?
- 2 What are the Enhanced SCRA Benefits?
- 3 Who Mandates Enhanced SCRA Benefits?
- 4 Who Qualifies for Enhanced Benefits?
- 5 How to Apply for SCRA Benefits
- 6 Conclusion
- 7 FAQs
What Is the Servicemembers Civil Relief Act (SCRA)?
The SCRA is a federal law created to ease the legal and financial burdens of military personnel and their family members affected by their active duty service. This law’s provisions were designed to empower active duty service members to devote their energy to the nation’s defense.
The SCRA extends financial and legal protections to all Army, Air Force, Coast Guard, Marine Corps, and Navy personnel as long as they’re on active duty military service. These are the commonly utilized provisions of the SCRA:
- Six percent limit on interest rates. Service members and their spouses can reduce or cap interest rates on any incurred debt acquired before entering active duty service. As per the SCRA, the maximum interest rate per year is 6%, and this interest rate reduction applies as long as the service member remains on active duty.
- Credit rating protection. Lenders are prohibited from denying or revoking credit, changing loan terms, or refusing to grant credit to service members. An insurance provider is also banned from not providing their services.
- Judicial relief. An active-duty military member mandated to attend a scheduled court hearing can request a postponement of civil court and civil administrative proceedings for at least 90 days. It should be highlighted that this protection doesn’t apply to criminal proceedings; it applies only to civil proceedings. Furthermore, suppose a court order enters default judgments against servicemembers because they failed to appear. In that case, that person can request that the matter be re-opened and the default judgment set aside.
- Protection from eviction. If a service member rents a home or apartment and the rent doesn’t exceed a certain amount, the landlord cannot evict that person or their dependents as long as that person is on active duty. This is unless the landlord obtains a court order. Moreover, service members can request that the court delay the order execution for 90 days. However, the court will decide whether to postpone eviction and, if so, for how long.
- Ability to terminate a lease agreement. Service members can generally terminate any residential and business property lease agreement before entering military service. Service members can also terminate a lease signed during active duty if they receive an order for a permanent change of duty station or if their next deployment orders will last over 90 days. That person must provide a written notice of cancellation to their landlord.
- Automobile lease cancellation. Service members can terminate an automobile lease if they are called to active duty service for at least 180 days after signing the lease agreement. They can also terminate the lease if they get orders for a permanent change of duty station outside the country or are deployed within a military unit for at least 180 days.
- Relief from foreclosure proceedings and forced sales. If a person is on active duty and their work results in their inability to pay a mortgage or meet the purchase terms or installment payment, the SCRA may be of service. SCRA protections mandate that real estate or vehicles may not be foreclosed without a court order if they breach a purchase contract’s terms because of active duty service.
- Termination and reinstatement of insurance. If a service member’s health insurance was canceled on active duty, it could be reinstated without losing benefits, penalties, or waiting periods. Life insurance is also protected from termination, lapse, and forfeiture for nonpayment of premiums. This protection applies to military service and an additional two years. Service members may also cancel professional liability insurance and have it reinstated—deadlines for applying for reinstatement vary depending on the insurance type.
- State tax relief. If that service member receives official orders to move from their home state to another, that person’s domicile or state of legal residence for tax purposes remains the same. SCRA prevents active duty members from paying state taxes based on their military income to any state other than their home state of legal residency. However, if that member or their spouse earns a non-military income, they may have to pay income taxes to the state where they’re stationed. This is provided that the state has an income tax.
Service members may opt to waive or cancel their SCRA rights. However, this waiver must be in written format and signed by that person during or after the active duty period. If the waiver was signed before that person entered into military service, the waiver will not be valid. This is why documents should be scrutinized to ensure there are no embedded waivers. For clarification, here are the requirements of the Department of Justice for the releases to be deemed valid:
- The document is an instrument separate from the contract
- The document’s duration must be limited to during or after the relevant period of military service
- The document must be in at least 12-point font.
What are the Enhanced SCRA Benefits?
Like any other law, the Servicemembers Civil Relief Act (SCRA) can be amended and enhanced. Here are some of the changes to the SCRA that help more people meet their financial obligations and more:
- Utilization of professional certificates and licenses. As of January 2023, the US Congress added a new provision to the Servicemembers Civil Relief Act. This provision allows service members and their spouses to utilize their professional certificates and licenses when they relocate because of military orders under certain circumstances. The only explicit exception is for those who practice law because this is not transferable.In this case, the license seeker must provide a copy of the order to the licensing authority in the new jurisdiction. They must be in good standing with the jurisdiction they were formerly part of and have been actively using their license for the last two years. The individual must adhere to the new jurisdiction’s standards and educational requirements. Moreover, the license sought must be of the exact scope in nature.
- Expanded coverage for contract termination. As of January 2023, the contract termination provision has been extended to more legal agreements, including gym or fitness center memberships, home security services, and fitness programs. Previously, this protection applied only to cable television, internet access, and cell phone contracts. Moreover, this protection applies to service members’ dependents accompanying them on relocation.
- Residency. The new SCRA protections mandate that service members and their spouses can now elect a domicile for their taxes. Previously, members were given protection from state income tax based only on their duty station but were also limited in their ability to change their residence.This update empowers service members to choose between their residence, spouse’s residence, or permanent duty station as their domicile. This can be a massive benefit for tax purposes, granting service members and their spouses added flexibility.
The main difference between the original SCRA protections and the updated ones is the added flexibility and expansion of covered institutions for the latter.
The enhanced SCRA provisions empower more service members and their dependents to lessen their financial obligations and other possible problems.
Who Mandates Enhanced SCRA Benefits?
According to the SCRA, the Attorney General of the Department of Justice has the authority to file a federal lawsuit against any person (or entity) who violates the SCRA rights of service members. This is provided that the service members meet the eligibility requirements, and the situation calls for the SCRA rights to be activated.
The Civil Rights division of the Department of Justice is tasked to enforce the SCRA protections. This institution is in charge of ensuring service members are granted their protections and that all affected institutions, whether commercial or not, adhere to the mandates of the SCRA.
The SCRA is a federal law, which means that SCRA protections extend to all states of the United States. However, there might be some slight changes in terms of taxes and the like because states have their own rules and regulations regarding taxes.
The benefits granted to active duty service members are not limited to the provisions of the SCRA. Some private institutions, like banks and other corporations, voluntarily provide enhanced benefits to service members. This is as long as these military personnel can give evidence that they’re indeed in active duty service.
Who Qualifies for Enhanced Benefits?
SCRA rights, including the enhanced benefits, extend to the following people:
- Active duty service members of the Coast Guard, Marine Corps, Air Force and Army;
- Reserve component members when serving on active duty;
- National Guard component members mobilized under federal orders for over 30 consecutive days or
- Active duty commissioned National Oceanic and Atmospheric Administration or Public Health Service officers.
Select SCRA rights may be extended to service members’ spouses and dependents. However, they must submit additional requirements to prove that select protections cover them. People with a valid power of attorney for the service member may exercise SCRA rights on behalf of the service member.
It should be noted that the term dependent covers the service member’s spouse, children, and other people that the service member cared for, which means more than half of their financial support for at least the past 180 days.
SCRA rights officially begin on the day that the service member enters active duty military service. In the case of Reserve components, the SCRA protections are activated once they receive certain military orders.
How to Apply for SCRA Benefits
To be transparent, service members can’t complete a single form to inform all creditors or institutions once they’re invoking their SCRA rights. To properly use SCRA benefits, military service personnel and their dependents, if covered under a certain protection, must obtain and submit specific documentation and send these documents to the particular institution.
Here’s a quick guide to help service members maximize their SCRA rights properly:
- Gather all documents. The most crucial part of this step is obtaining a copy of the active-duty orders from the military. This may be requested from one’s military branch office. Then, that person should write a letter to the institution explaining the particular SCRA benefit they intend to use.
- Contact the affected institution or person. The service member should submit a written notice to the person or institution required to honor that person’s rights. Each institution may have a preference for how to receive these types of messages in writing. That’s why the letter must be sent to the correct location. However, service members shouldn’t mistake a phone call as sufficient notice because they must submit the request in writing to submit it formally.
- Provide evidence of active duty. Aside from the letter stating which SCRA benefits they wish to activate, the military member must provide proof of their active-duty status. The easiest method is for the military member to obtain a copy of active-duty orders from the federal organization or military branch they serve. If this isn’t possible, a letter from the commanding officer may also be provided. This letter must state when the service member began active duty.
- Ask for the benefit to be honored. It is vital to ask which type of SCRA benefit is explicitly requested. Suppose the service member intends to activate several benefits from different institutions. In that case, they should prepare additional requests because there should be separate letters for every company or person being written to.
The Servicemembers Civil Relief Act provides protections that can help alleviate servicemembers’ legal and financial burdens. If someone needs advice on how to defend their SCRA rights properly, they should seek the assistance of military legal assistance attorneys.
An attorney would have the knowledge and experience to help service members fight for their rights and empower them to take the best steps moving forward.
Military service can be demanding, and service members should be able to fulfill their obligations to focus on their jobs. That’s why there are laws like the SCRA in place to help ensure that personal matters won’t affect the ability of service members to serve the country.
The SCRACVS can be of service in helping service members verify their military status to take advantage of their legal rights. Please explore our website to learn more about this today.
What are SCRA benefits?
The original SCRA protections include a 6 percent cap on interest rates, credit rate protection, judicial relief from civil proceedings, eviction protection, the ability to terminate a lease of agreement, automobile lease cancellation,relief from foreclosure proceedings and forced sales, termination, and reinstatement of insurance, and state tax relief. The enhanced SCRA benefits include utilizing professional certificates and licenses, expanded coverage for contract termination, and residency flexibility.
What armed forces are covered by SCRA?
The SCRA covers the Coast Guard, Marine Corps, Air Force, and Army. The SCRA is also extended to reserve members if they meet the requirements.
What is the origin of the SCRA?
The SCRA was formerly the Soldiers’ and Sailors’ Civil Relief Act. This law provided protections for eligible service members so they could perform their duties legally and financially with fewer worries.
What are the changes in SCRA?
The changes in the SCRA did not alter the existing SCRA benefits. The enhanced SCRA benefits expanded the protections granted to service members and other eligible people, including flexibility to choose which state tax law to follow, the ability to use professional licenses and certificates in other states for more career opportunities, and widened coverage for contract termination without penalties.