Veteran Services: Survivor benefit plan death indemnity compensation offset
There are two types of SBP/DIC beneficiaries. First are widows and widowers of service members who served a full career in the military and paid into SBP as a retirement. The second groups' sponsors died while on active duty and qualify for SBP by statute. As we continue to push to get the SBP/DIC offset abolished and we often get small improvements rather than a total abolition; the program gets more difficult to understand. But here goes. Following is where the program currently stands:
Retirees: If the retiree dies of a full or partial service connected disability or had been 100 percent service connected disabled for 10 or more years, regardless of what caused his death, the survivor would indeed be entitled to DIC. There is a dollar per dollar offset of SBP payments for DIC payments. Many people have asked if it would really be worthwhile to file for DIC if their service member spouse dies and they are already receiving or going to receive SBP. The answer now is almost always yes. This is because we have been working for years to end the SBP/DIC offset; just as we have worked to end the military retired pay/VA disability pay offset. We have not yet had the same degree of success but we have made some progress.
The DIC payment became a flat payment regardless of rank in 1993. It is presently a tax free monthly payment of $1,283.11. Every year it receives a COLA adjustment. If the SBP is 55 percent of the retired pay the offset will probably completely offset the SBP. Only the very highest ranks in the officers or enlisted ranks would receive more. However, there is the advantage of it being tax free while SBP is taxable. Then if the DIC completely wipes out the SBP payment a beneficiary would be qualified to have all the monthly SBP payments returned to him or her. That could be a large lump sum. (It would be taxable.) Additionally, to partially correct the offset, Congress passed a SSIA (Special Survivor Indemnity Allowance) payment bill. It started in 2008 at only $50 a month and through additional increases and modifications has reached $310 a month. Last year the SSIA was made permanent and a COLA was added.
Died on Active Duty: In this case, the survivor is entitled to the present SSIA payment of $310 a month COLA which is nontaxable. (No return of premiums since they did not make any). In addition - if there are minor children in the family, they too will qualify for DIC. Presently a surviving spouse with children under the age of 18 will also receive $317.87 a month per child plus a two-year transition for the parent of $250 a month. The benefit for the child runs out when he/she turns 23. If a child is permanently disabled they may continue to be eligible into adulthood. Call the DC office at (703)-684-1981 to go over these detailed requirements.
We are still working to end the SBP/DIC offset completely. In the House H.R. 846 has 237 co-sponsors while the Senate's S. 339 has 38 co-sponsors. So you can see there is wide bipartisan support. But it is very unlikely that we will get the bills passed this year. If not, we will have to start again next year. We are not giving up on this issue. Finally, there are also two special programs A&A (Aid and Attendance) which presently pays an additional $317.87 a month and Homebound which pays an additional $148.91 a month which a parent might be eligible for if he/she is suffering from certain disabilities.
To sum this up; even if you are eligible for SBP if your service member's death was in the line of duty OR service connected you may qualify for DIC. It's definitely worth filing for. Anyone who would like to discuss the matter further or has questions can contact the Executive Director of the Legislative Affairs Office (LAO), Deirdre Parke Holleman at (800) 554-8732 or dhollemanTREA Washington Update March 28, 2018 ]
As always please see your local County Veterans Service Officer if you have any questions. You can contact your local VSO at (218) 631-7617 or by email at firstname.lastname@example.org and as always have a great week.