Surviving Spouse Corner: The SBP/DIC Offset — A Military Problem

By Patricia Bergquist, Surviving Spouse Advisory Committee member

The Survivor Benefit Plan (SBP) was enacted into law in 1972. It includes a dollar-for-dollar offset of Dependency and Indemnity Compensation (DIC) from SBP, called the SBP/DIC offset, for surviving spouses of retired servicemembers who voluntarily participated in the insurance annuity program, paid premiums, and then died of a service-connected issue. Post-9/11 active duty surviving spouses also are impacted. The offset affects over 63,000 military surviving spouses. 

Rep. Joe Wilson (R-S.C.) and Sen. Bill Nelson (D-Fla.) introduced legislation (H.R. 846 and S. 339) to repeal provisions that require offset of SBP by the amount of DIC awarded for surviving spouses entitled to both benefits. SBP is an employment benefit purchased by the military retiree as an income supplement for surviving spouses. DIC, on the other hand, was created to compensate for economic losses suffered as a result of the veteran’s death. Military surviving spouses are the only ones subject to this offset in the entire government, which is unjust and unfair.

If you are a military retiree with a VA disability rating who is paying premiums for SBP or die of service-connected causes or if you are currently serving on active duty and die in the line of duty, this offset will affect your spouse. Most military retirees and active duty servicemembers have never heard of SBP, DIC, the offset, or how it financially could affect their own spouses. Your survivor will receive 55 percent of the base retired pay selected based on the rate of compensation at the time of retirement. For active duty deaths, SBP is 55 percent of the amount of final base pay at one’s rank on the date of one’s death times 75 percent. Of the survivors affected, 65 percent receive zero in SBP and only $15,095 a year in income, instead of SBP plus DIC. Could you survive on DIC alone? 

In 2008, as a first step toward phasing out the offset, Congress passed the Special Survivor Indemnity Allowance (SSIA), which provides incremental increases over a 10-year period with a sunset date of October 2017. SSIA was extended only until May 2018 at $310 a month in the FY 2017 National Defense Authorization Act (NDAA). If the SSIA is not extended in the FY 2018 defense bill, the impacted surviving spouses will lose $3,720 a year in survivor benefits. 

The sense of Congress is that the offset should be eliminated but the costs are high. The Senate Armed Services Committee voted for a permanent SSIA extension at $310 a month with COLA increases beginning in 2018. The House did not include SSIA in its version of the FY 2018 NDAA. 

To date, H.R. 846 has 165 cosponsors, and we need 220. S. 339 has 33 cosponsors with 60 needed. Without enough cosponsors, this issue will continue to go unfunded. Please join our advocacy efforts on this issue by contacting (via phone, email, or office visits) members of Congress to garner their cosponsorship/vote to eliminate the SBP/DIC offset. Use the MOAA toll-free number (1-866-272-6622) to call the Capitol Switchboard, and ask to be connected to your representative and senators. Then, speak with the military legislative assistant to seek cosponsorship for the legislation. Voices are needed to end the injustice!