Check out MOAA’s brochure (Undue Sacrifice) for an easy to read version of this fact sheet.
Issue: Congress should repeal the law that reduces military Survivor Benefit Plan (SBP) annuities by the amount of any survivor benefits payable under the VA Dependency and Indemnity Compensation (DIC) program.
Background: Under current law, the surviving spouse of a retired member who dies of a service-connected cause is entitled to DIC from the Department of Veterans Affairs. If the military retiree was also enrolled in SBP, the surviving spouse's SBP benefits are reduced by the amount of DIC (currently $1,154 per month). A pro-rated share of SBP premiums is refunded to the widow upon the member's death in a lump sum, but with no interest. The offset also affects all survivors of members who are killed on active duty.There are approximately 54,000 military widows/widowers affected by the DIC offset.
MOAA believes SBP and DIC payments are paid for different reasons. SBP is purchased by the retiree and is intended to provide a portion of retired pay to the survivor. DIC is a special indemnity compensation paid to the survivor when a member's service causes his or her premature death. In such cases, the VA indemnity compensation should be added to the SBP the retiree paid for, not substituted for it. It's also noteworthy as a matter of equity that surviving spouses of federal civilian retirees who are disabled veterans and die of military-service-connected causes can receive DIC without losing any of their purchased federal civilian SBP benefits.
In the case of members killed on active duty since October 7, 2001, a surviving spouse with children can avoid the dollar-for-dollar offset by assigning SBP to the children. But that forces the spouse to give up any SBP claim after the children attain their majority - leaving the spouse with less than a $14,000 annual annuity from the VA. Those who give their lives for their country deserve fairer compensation for their surviving spouses.
In each of the last three years, the Senate has passed Sen Bill Nelson's (D-FL) amendment to repeal the SBP-DIC offset in its version of the Defense Authorization Act, only to have the full provision dropped in final negotiations with the House. The 2008 Defense Bill did include a provision authorizing a special payment of $60 per month to survivors of members entitled to retired pay (or of Guard/Reserve retirees who died before age 60) whose SBP annuities are reduced by VA survivor benefits, effective Oct. 1, 2009. That amount will increase by $10 each year for 4 years. At MOAA’s urging, the 2009 Defense Authorization Act extended this payment to survivors of active duty deaths.
MOAA Position: MOAA strongly supports repeal of the DIC offset to SBP, because the two benefits are paid for different reasons and as a matter of equity with federal civil service practices. Enactment of this repeal is a major MOAA goal for 2010.
Key Bills/Status: In the House Congressman Solomon Ortiz has introduced H.R. 775, and in the Senate Bill Nelson has introduced S. 535, both would repeal the requirement to deduct DIC payments from SBP annuities.
In June 2009, Congress passed the Family Smoking Prevention and Tobacco Control Act of 2009 (PL 111-31) increasing the monthly Special Survivor Indemnity Allowance (SSIA) to $150 beginning in FY2014 and rising to $310 in FY2017.
In late July 2009, Senator Bill Nelson (D-FL) introduced an amendment to the Senate version of the NDAA (S. 1390) repealing the DIC deduction. However, in October the Conference Committee did not adopt Senate provision repealing the DIC deduction.
In May 2010 the House passed their version of the FY 2011 NDAA (HR 5136) extending SSIA payments to the “forgotten widows”, an early 1970’s group of survivors who were circumstantially excluded from SBP enrollment. The Senate version of the FY 2011 NDAA (S. 3434) does not include this provision but MOAA is working with Senator Nelson to attach an amendment.
