We need you to take action today and let your Senators know that we want them to end the Survivor Benefit Plan (SBP)/Dependency Indemnity Compensation (DIC) offset, which is effectively a “widow’s tax.” Now that Congress has returned from summer recess, lawmakers are working to pass the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020. The House authorization bill that was passed in July included a provision that would eliminate the SBP/DIC offset; the Senate version did not. Now the Senate and House must agree on what will end up in the final version of this bill. It is up to us to let the Senate know that we want the SBP/DIC offset provision to be included with the final version of the NDAA.
Currently, purchased SBP annuities are offset by the amount of any benefit payable under the VA DIC program. SBP is not a government gratuity benefit; rather, it is a type of insurance purchased out-of-pocket by military retirees for their survivors while DIC is a VA benefit intended to provide spouses of veterans who died from a service-connected condition some semblance of financial security. Thousands of survivors of military retirees are adversely affected by this unfair offset between SBP and DIC benefits.
Upon the retiree’s death, the SBP annuity is paid monthly to eligible beneficiaries; however, if a surviving spouse is also entitled to DIC, the SBP benefit is reduced by the amount of the DIC benefit. In general, when DIC benefits are payable but the monthly rate is equal to, or greater than, the monthly SBP payment amount, beneficiaries lose the entire SBP payment
This provision, which is in accordance with DAV Resolution No. 010, which calls for Congress to repeal the offset between SBP annuity payments and DIC payments, would eliminate the offset and allow surviving spouses to receive both the purchased SBP annuities and their earned DIC benefits.