The Latest on the SBP-DIC Offset Elimination

The Latest on the SBP-DIC Offset Elimination
Photo by Elizabeth Fraser/Army

The elimination of the Dependency and Indemnity Compensation (DIC) offset from the Survivor Benefit Program (SBP) payments is still a bit confusing for many. Let’s try to clear the air.


SBP is a survivor annuity administered by DoD. DIC is a survivor annuity administered by the VA. Receiving both payments simultaneously has been considered double dipping (two government payments for the same event), and so the DIC amount has been subtracted from the SBP to prevent double dipping.


The FY 2020 National Defense Authorization Act (NDAA) included MOAA-supported language that eliminated this offset, a change that will be phased in through 2023. The bill marked the successful conclusion of a long advocacy process, but MOAA remains engaged to assist members through its implementation.


The Details

This offset elimination only affects survivors who are eligible to receive both SBP and DIC payments. The offset is where the DIC amount is subtracted from the SBP amount. The DIC has and will continue to be paid in full; it’s the SBP amount that’s been reduced by the amount of DIC paid.

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For some survivors, the DIC amount subtracted from your SBP left you with no SBP payment, as the DIC amount was greater than your SBP amount. You still have SBP eligibility, you just don’t receive your SBP.


Survivors who received an SBP premium refund in the past because you were denied your full SBP amount due to the offset do not have to pay back the refund. 


Whether you received no SBP or a partial SBP amount due to the offset, all with the offset received the Special Survivor Indemnity Allowance (SSIA) payment. SSIA is a payment to minimize the damage done to your SBP amount by the DIC offset.


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Survivors with both SBP and DIC will receive a letter from the Defense Finance and Accounting Service (DFAS, the administrator of SBP) in December explaining how the first phase of the offset elimination (2021) will affect you. The letter will provide you with your payment amounts so you can see the benefit of the first offset elimination actions starting with your Feb. 1, 2021, payment. The offset elimination phase-out continues in 2022, and the offset ends in 2023.


The bottom line: The DIC offset amount in your SBP will decrease, thereby allowing you to collect more of your SBP amount. Plus, you will continue to receive SSIA.


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The SSIA payment will continue until 2023, when it will be discontinued because all SBP and DIC survivors will be receiving their SBP and DIC amounts in full.


Read more about the process on the DFAS website.


Surviving Spouses and MOAA

Did you know a surviving spouse of an officer who was not a MOAA member can join in her or his own right? Help MOAA maintain the achievements made to date and fight other negative financial impacts, such as the lower computation for Dependency and Indemnity Compensation as compared with other federal survivor benefits. Join now to make sure your survivor benefits are protected.  


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About the Author

Lt. Col. Shane Ostrom, USAF (Ret), CFP®
Lt. Col. Shane Ostrom, USAF (Ret), CFP®

Ostrom is MOAA's former Program Director, Financial & Benefits Education/Counseling