I mentioned in my first article about the Survivor Benefit Plan-Dependency and Indemnity Compensation (SBP-DIC) offset elimination that MOAA would provide more details as they emerged. Well, here they are.
DoD and the Defense Finance and Accounting Service (DFAS) have provided a list of answers to frequently asked questions about the process. The Coast Guard pay organization follows the same law and DoD policy. Some key takeaways are:
- If you do not have SBP eligibility because your military retiree spouse never enrolled, this change does not affect you. This is only for survivors who have eligibility for both SBP and DIC. This program restores the SBP for survivors who were owed SBP, but, due to the SBP-DIC offset, did not receive part or all their SBP. This change does not allow members to enroll in SBP who did not enroll at the time of military retirement.
- If you received a premium refund as a result of the DIC offset, the refund does not have to be returned to your pay agent as a part of the SBP-DIC Offset change.
- Nothing will happen to SBP pay in 2020. Remember, this change has nothing to do with your DIC. You will continue to receive DIC in full as you always have. The changes are to your SBP payments.
[RELATED: MOAA's Widows Tax Resources]
- In 2020, pay agencies will prepare to implement the SBP pay changes. Your responsibility in 2020 is to ensure your pay information is updated at your pay agency (DFAS or the USCG) to help the changes go smoothly.
- In 2021, the first changes to SBP pay will begin. Currently, your SBP is reduced by the amount of DIC dollar for dollar. SBP will be reduced by no more than two-thirds of the amount of DIC rather than by the entire amount of DIC in 2021. This may free up more SBP for payment to some.
- In 2022, SBP will be reduced by no more than one-third of the amount of DIC received.
- In 2023, the SBP-DIC offset will be eliminated in total, so that surviving spouses eligible for both programs will receive both SBP and DIC in full, effective Jan. 1 (paid as of Feb. 1).
- The Special Survivor Indemnity Allowance amount will eventually go away as the DIC offset is eliminated.
For more information, download DoD's FAQ paper here.