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The SBP-DIC Offset Phased Elimination: Phase Two is Here



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 is one-third of the amount of the DIC payment.

DIC payments will not be affected.

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

If a spouse’s gross SBP benefit is less than one-third of the amount of the DIC they receive from the VA, the spouse will not receive an SBP payment. About 12 percent of spouses (approximately 7,600) will not see a change in their SBP payment in 2022 because their gross SBP benefit is less than one-third 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).

DFAS has a new Quick Reference Guide for the SBP-DIC Offset Phased Elimination. Click here to get yours (right click and choose "Save As" to download PDF to your computer or device)

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 were paid on February 1, 2022. The last payment of Phase Two is for December of 2022, which will be paid on January 3, 2023.  

Phase Three: Starting January 1, 2023 – First Payment is February 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 spouses will begin to receive their full SBP monthly 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

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

Annuitant Account Statements are available in their myPay accounts: https://mypay.dfas.mil 

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

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 Mar 30, 2022