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Educate your Beneficiary: Three Things Every Spouse SBP Annuitant Should Know

It is a difficult topic to bring up, but knowing your loved ones are provided for and prepared for your death can be a good feeling. If you’ve elected Survivor Benefit Plan coverage as a way to provide for your spouse after you’ve died, there are a number of topics your spouse should know before it’s too late. Taking the time now will prevent confusion and worry at what will inevitably be a time of stress and grief.
 
WHAT WILL MY SPOUSE HAVE TO DO TO INITIATE PAYMENT ON HIS OR HER ANNUITY?
 
First of all, your spouse must notify DFAS Retired and Annuitant Pay of your death and provide a copy of your Certificate of Death. Complete instructions for who to contact, what forms to file and how to file them can be found at LINK. Copies of all forms that need to be filed can be found at http://www.dfas.mil/retiredmilitary/survivors/Retiree-death.html.
 
When DFAS learns of your death, we will also send necessary forms to initiate payment. Included in that packet is the application, tax withholding form and direct deposit sign up instructions. Annuity payments are deposited monthly.
 
Please keep in mind that 1099R’s are not automatically issued for deceased members. If you want to receive a 1099R on the behalf of a member who passed away, a certificate of death must be on file, and you must request that a 1099R be issued. If you would like to make this request, or have questions regarding a 1099R for a deceased member, see article in this newsletter.
 
HOW MUCH WILL MY SPOUSE GET?
 
The amount of the annuity depends on the level of coverage you chose. Full coverage uses your gross retired pay as the annuity base amount; reduced coverage uses a lesser amount that you selected at retirement. Annuity payments are calculated at 55 percent of the base amount. The annuity base amount increases over time with cost of living adjustments.
 
You can see exactly how much your spouse would receive by viewing your monthly e-RAS statement on myPay. The section titled Survivor Benefit Plan (SBP) Coverage shows your level of coverage, your annuitant’s information and the current Annuity Payable. 
 
WHAT CAN AFFECT MY SPOUSE’S ANNUITY AMOUNT?
 
Entitlement to Dependency and Indemnity Compensation (DIC) can reduce how much SBP your spouse will receive. DIC can be awarded by the VA if your death is related to a disease or injury you incurred while in the line of duty.
 
If your spouse remarries after your death it can change the way the DIC offset is applied or it can also stop the entitlement to SBP completely, depending on the spouse’s age at the time of remarriage.
 
If your spouse remarries before age 55, entitlement to SBP stops. However, if your spouse remarries between the ages of 55 to 57, they will continue to be entitled to SBP, and any DIC awarded to them would offset the annuity amount. Lastly, remarriage after age 57 allows the spouse to continue receiving SBP without any DIC reduction.
 
Receiving Social Security does not affect the SBP annuity regardless of your spouse’s age or marital status.


Updated September 18, 2013.