By CWO4 Lewis Tolleson, USCG-Ret., Director; CWO3 Patrick A. DeCrane, USA-Ret.; Lt. Col. William A. Pierce, USA-Ret.; and Capt. Bud Schneeweis, USCG-Ret., Benefits Information

Social Security, SBP

How are Social Security and the Survivor Benefit Plan (SBP) related?

Congress created SBP intending it to supplement Social Security's survivor benefit program. The military services, as employers, began contributing to the Social Security fund for active duty servicemembers Jan. 1, 1957, and Congress began subsidizing the cost of SBP Sept. 21, 1972. Knowing that typically, a surviving spouse is entitled to receive the retiree's full Social Security benefit at age 65 or older, Congress crafted SBP to integrate with military-earned Social Security. This combination ensures receipt of 55 percent of the covered amount of retired pay to a surviving spouse for his or her lifetime and allows SBP to cost less than similar survivor plans.

The government considers only a surviving spouse's entitlement to receive the military retiree's service-contributed Social Security benefit in determining the Social Security offset. SBP amounts are reduced accordingly.

How much will the Social Security offset (SSO) be?

The amount of the SSO is determined individually. For a surviving spouse whose military spouse retired or was retirement-eligible before Oct. 2, 1985, the SSO will be calculated using both the old SSO method and the two-tier method. Whichever method generates a larger annuity will be applied.

For a surviving spouse whose military spouse was first eligible to retire Oct. 2, 1985, or after, the reduction is from the first tier of 55 percent of the base amount to the second tier of 35 percent. The SSO considers only the member's military-contributed wage credits. Civilian employment after military retirement serves to increase the Social Security benefit and will result, in most cases, in combined SBP and Social Security benefits to the surviving spouse that exceed 55 percent of retired pay.

How does Social Security work for spouses?

Each member of a married couple has the option to receive a Social Security worker's benefit, if applicable (based on his or her own earnings), or a spouse's benefit (one-half of his or her spouse's).

When a retiree dies, the surviving spouse is entitled to receive the higher of his or her own entitlement or the worker's. Spouses may begin to receive Social Security survivor benefits as early as age 60, with SBP not beginning its offset (or second tier) until age 62. If a surviving spouse elects to receive Social Security survivor benefits at age 60, the lifelong benefit is 71.5 percent of the retiree's full benefit; at age 61, 77.2 percent; at age 62, 82.9 percent; at age 63, 88.6 percent; and at age 64 or older, 100 percent.

Also, retirees who retired or became retirement-eligible before Oct. 2, 1985, and opted to receive an early, reduced Social Security benefit must provide proof to the Defense Finance and Accounting Service to ensure the proper SSO calculation.

Are SBP monthly premiums suspended when there is no longer an eligible spouse?

Yes. If spouse coverage is elected and the spouse is lost through death or divorce, the cost of SBP coverage is suspended. However, if you remarry, the premiums will start again on the one-year anniversary of the remarriage when the new spouse becomes an eligible beneficiary, provided you do not withdraw from the program during this one-year period.

Coverage and costs for an election for a new spouse are effective after one year of marriage or upon the birth of a child of that marriage, whichever occurs first. If remarried to the spouse for whom you elected coverage at the time of retirement (or during the Sept. 21, 1972, to March 20, 1974, open-enrollment period), coverage and costs are effective immediately.