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Surviving Spouses Currently Entitled to Both SBP and DIC in 2022: Watch Your Mailbox for Your Individual Estimate Letter

 


On January 1, 2022, Phase Two of the SBP-DIC Offset Phased Elimination will begin.

To help surviving spouses entitled to both SBP and DIC in 2022 understand the effect of this change, DFAS will mail letters in early December with individual estimates of 2022 SBP payments.

As a reminder, the SBP-DIC Offset Phased Elimination only affects SBP payments issued by DFAS. The changes do NOT affect Dependency and Indemnity Compensation (DIC) payments from the VA. Eligible surviving spouses will continue to receive the full amount of DIC from the VA.

Please do not call the DFAS Customer Care Center to ask for your estimates. They will not be available to view in your account until late January of 2022.

What Happens in 2022 – Phase Two of the SBP-DIC Offset Phased Elimination

January 1, 2022 marks the start of the second phase of the SBP-DIC Offset Phased Elimination.

The changes affect surviving spouses who are, or who will become in the future, eligible for both Survivor Benefit Plan (SBP) payments and Dependency and Indemnity Compensation (DIC) payments, and who were previously subject to a full or partial SBP-DIC offset.

In Phase Two of the SBP-DIC Offset Phased Elimination the amount that is offset (deducted) from the spouse’s SBP annuity payment will be one-third of the amount of the DIC payment.

DIC payments will not be affected.

The SBP payment will be reduced by the amount of the offset (1/3).

If a spouse’s gross SBP benefit is less than 1/3 of the amount of the DIC they receive from the VA, the spouse will not receive an SBP payment. A small number of spouses will not see a change in their SBP payment in 2022 because their gross SBP benefit is less than 1/3 of their DIC payment from the VA.

Spouses who have their SBP offset by DIC will continue to receive the Special Survivors Indemnity Allowance (SSIA), up to the maximum amount of $346 per month (for 2022), or up to gross amount of SBP (if the gross amount of SBP is less than $346).

Summary

VA will pay:
•    100% of the DIC payment

DoD/DFAS will pay:
•    The remainder of the SBP benefit after deducting an amount equal to 1/3 of the spouse’s DIC payment from the SBP gross annuity amount (SBP gross – 1/3 of DIC = SBP net)
•    Plus the appropriate amount of SSIA up to the maximum allowable ($346).

The effective date of Phase Two is January 1, 2022. January 2022 benefits will be paid on February 1, 2022.

Phase Three: Starting January 1, 2023

In the third and final phase that begins January 1, 2023, there will be NO offset deducted from SBP payments. The SBP-DIC offset will be fully eliminated as of January 1, 2023. That means you will begin to receive your full SBP payments with no offset (reduction) on February 1, 2023.

DIC payments will not be affected.
    
The SBP benefit will be paid in full (no offset).
    
SSIA will NOT be paid.

Additional Notes

You will also receive a January 2022 Annuitant Account Statement (AAS) near the time of your February 1, 2022 payment that will show changes to your SBP and/or SSIA payment because of the second phase of the SBP-DIC Offset Phased Elimination.

Annuitant Account Statements are available in your myPay account:
https://mypay.dfas.mil

Reminder: if you previously received a refund of SBP premiums paid due to the SBP-DIC offset, you will NOT need to pay back that refund because of this change in the law.

You do not need to contact DFAS to notify us that you are impacted by the SBP-DIC Offset Phased Elimination or its changes.

Questions?

Check out the full range of Frequently Asked Questions on our SBP-DIC News webpage: https://www.dfas.mil/sbpdicnews

We also have a webpage explaining SBP, DIC and SSIA: https://www.dfas.mil/sbpdicssia


 

Page updated: Dec 9, 2021