Repeal the SBP/DIC Offset for Surviving Spouses
SBP allows uniformed services retirees to elect to
provide continuing financial support for an eligible survivor. SBP provides the survivor 55% of the
servicemember’s selected military retired pay.
Enrollment is elected at the time of retirement, and the retired member
pays 6.5% of retired pay as a premium.
Automatic coverage is extended to survivors of servicemembers who die on
PREMIUMS ARE PAID MONTHLY DURING RETIREMENT, UP TO 30 YEARS of payments.. SBP MONEY COMES FROM THE DEFENSE DEPARTMENT
Dependency and Indemnity
Compensation is a VA program providing a modest annuity of $1,254.19 per month
($15,050) for survivors of veterans whose death is determined to have been
caused by military service. DIC IS PAID FROM THE VETERANS ADMINISTRATION
TWO DIFFERENT FUNDING SOURCES
Often, the offset wipes out the SBP annuity
the military retiree paid for.
The October 2007 report of the
Veterans Disability Benefits Commission urged elimination of the offset for all
SBP-DIC widows, asserting that when military service causes the member’s death,
the indemnity compensation from the VA should be paid in addition to SBP coverage, not subtracted from it.
In multiple Congresses, a
majority of House and Senate members acknowledged the inequity and cosponsored
corrective legislation to recognize SBP and DIC are paid for different
reasons. SBP is a
servicemember-purchased annuity, whereas DIC is an indemnity payment when
military service caused the member’s death.
Further, service-disabled retirees have limited opportunities to
purchase additional life insurance, and policies that are available impose
In 2008, Congress acknowledged the inequity in law, authorizing a
modest Special Survivor Indemnity Allowance (SSIA) for SBP-DIC widows to begin
phasing out the offset. In June 2009,
Congress took the next step, increasing SSIA monthly payments to $200 beginning
in FY2015 and rising to $310 in FY2017. Barring an additional
law change, SSIA authority will expire October 1, 2017. The
accompanying House Armed Services Committee press release stated, “This legislation (SSIA) is latest step in our continuing
effort to eliminate the so-called ‘widow’s tax’, which has long denied
surviving family members the full payment of their Survivor Benefit Plan
benefits… this bill does not completely end the offset
SSIA WILL BE DISCONTINUED IN OCTOER 2017. THERE HAVE BEEN NO COLAS AS THE GOVERNMENT
SAYS THERE IS NO INCREASE IN THE COST OF LIVING! THIS
MEANS INCOMES WILL BE CUT $310 PER MONTH.
In the ultimate irony, a
separate law, validated by the courts, terminates the offset for
SBP-DIC-eligibles who remarry at age 57 or later. So current law punishes survivors who remarry
before age 55 by ending their SBP and DIC eligibility – and punishes survivors age 57 or older who
don’t remarry by imposing the SBP-DIC
No other federal surviving
spouse is required to forfeit his or her federal annuity because military
service caused their sponsor’s death.
Further, the offset does not apply to surviving military children – only
to the spouse. And no other federal survivor is required to
remarry to avoid a reduction in his or her survivor annuity eligibility.
AS OF 30 SEPTEMBER
Surviving spouses received a SBP offset of
$1254 per month, but received SSIA $275 of their SBP in a separate payment,
losing approximately $1000 per month.
Surviving spouses received DIC and no SBP, (because their SBP
payment was less than DIC). This mostly
affects Enlisted ranks.
63,182 Surviving spouses
affected by this problem, with numbers declining rapidly due to the aging of
the survivors. (Maybe Congress hopes we
will all be gone soon?)_
IF THE SSIA PROBLEM
IS NOT FIXED PERMANENTLY THIS YEAR, WIDOWS WILL PROBABLY NOT GET A COLA, AND
WILL BE CUT $310 PER MONTH.
the SSIA was put in effect, it was with the expectation that the total Offset
would be settled within the 10 year period, which Congress has not managed to
FIX THE OFFSET
COMPLETELY THIS YEAR, we do not need another BandAid approach to this.