Paying for SBP

Defense Finance
and Accounting Service
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Paying for SBP

There are four methods of paying for your SBP coverage if you elect it:
  • Deductions from your retired pay
  • Deductions from your VA pay
  • Direct remittance
  • Paid Up Status

Deductions from your Retired Pay (Normal Payment Method)

The normal method of paying for SBP coverage is by an automatic deduction from your retirement pay. The vast majority of retired members with SBP coverage pay through this means. It is implemented automatically if you elect SBP coverage at the time you retire.

Deductions from your VA Pay

If you have been ruled severely disabled by the Department of Veterans Affairs (VA) and your VA compensation exceeds your retired pay, you don't receive retired pay from DFAS.  As a result, we cannot automatically deduct SBP premiums from your monthly pay. (See Disability Entitlements for information about the Branch of Service/VA offset),

In this case, the best way to pay for your SBP coverage is to have your payments deducted from your VA compensation and forwarded to DFAS Retired and Annuitant Pay by the VA.  Thousands of retirees take advantage of this process.If you are interested in taking part, please have the VA help you complete an Authorization for SBP Cost Deduction (DD 2891) and mail or fax it to the Direct Remittance address listed below.

Direct Remittance

Direct remittance is only for those retired members who do not receive retired pay from DFAS or who do not receive enough retired pay to pay for SBP premiums. Direct remittance members who choose not to have their SBP payments deducted from their VA pay must remit SBP premium payments directly to:

Defense Finance and Accounting Service, DFAS-CL
SBP and RSFPP Remittance
P.O. Box 979013
St. Louis, MO  63197-9000

Payments sent to any other location, including Retired and Annuitant Pay offices at DFAS Cleveland, will not be received.  Any delinquent amounts carried over into a new billing month will accrue an interest fee calculated at 6 percent Annual Percentage Yield.

Paid Up Status

Beginning Oct. 1, 2008, any retiree who has paid 360 months of SBP premiums and has reached the age of 70 is no longer be required to make monthly payments for their SBP coverage.  If you meet these requirements, your SBP election and account will remain active, and benefits to annuitants will be uninterrupted, but there will be no further cost to you.  To help you track your status, Retiree Account Statements (RAS) include a "premium counter" indicating the number of months of paid premiums credited to your account.

Learn more about SBP

  • Advantages & disadvantages - Things to consider before enrolling
  • Enroll - How to set up your SBP account
  • Eligible beneficiaries - Find out who can be covered
  • Cost - What SBP costs at the different coverage levels
  • Update beneficiary - How to update beneficiaries or update contact information
  • Change or stop coverage - When you can change coverage or beneficiary 
  • Educate your beneficiaries - What your beneficiary needs to know
  • What happens when you die - Next steps for your beneficiary

Read about these topics at SBP overview

Page updated February 28, 2013.