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Spouse SBP Annuitants and Active Duty/Line of Duty Surviving Spouses: Watch Your Mailbox for Special Mailings Later this Year

 

Individual Estimate Letters for Spouses Eligible for Both SBP and DIC in 2022


This coming January marks the start of the second phase of the SBP-DIC Offset Phased Elimination, in accordance with the National Defense Authorization Act for Fiscal Year 2020, which modified the law that requires an offset of Survivor Benefit Plan (SBP) payments for surviving spouses who are also entitled to Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs (VA).

In Phase Two of the SBP-DIC Offset Phased Elimination, which begins January 1, 2022, the amount that is offset (deducted) from the spouse’s SBP annuity payment will be one-third of the amount of the DIC payment. January 2022 benefits will be paid on February 1, 2022.

To help surviving spouses who are eligible for both SBP and DIC in 2022 understand the effect of this 2022 change, DFAS will mail you a letter with an individual estimates of your 2022 SBP payment. We will mail your pre-estimate letter in December of 2021.

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.

 You should also be aware that Annuitant Account Statements for spouses now show their current gross SBP benefit at the bottom of the statement.

 You can estimate your net SBP payment for 2022 using the current gross SBP benefit amount that is on your statement. Subtract an amount that is equal to 1/3 of your current DIC payment FROM the amount of your current gross SBP benefit. The result is approximately what your SBP payment will be in the second phase. Keep in mind that if there is a Cost of Living Adjustment (COLA) for 2022, it will increase the amount of your DIC payment and your gross SBP payment.

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

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.

Watch for your pre-estimate letter in the mail in December of 2021.

Questions?

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



Special Information for Active Duty/Line of Duty Surviving Spouses


The Department of Defense Survivor Benefit Plan (SBP) provides financial support to military spouses and/or children when a military member dies on active duty or inactive duty in the line of duty, or after retirement, if the retiree elects coverage and pays premiums.

The Survivor Benefit Plan (SBP) provides eligible beneficiaries with a monthly payment known as an annuity. The recipient of an SBP annuity is referred to as the annuitant.

When a currently-serving member dies on active duty or on inactive duty in the line of duty, the surviving spouse has the option, in consultation with the Secretary of the Military Department, to request to have the Survivor Benefit Plan (SBP) annuity paid directly to an eligible dependent child or children instead. This is called the “Optional Annuity for Dependent Children.”

The Optional Annuity for Dependent Children, often called the “Optional Child Annuity,” is only allowed when the service member died on active or inactive duty, in the line of duty, after October 7, 2001.

The National Defense Authorization Act for Fiscal Year 2020 directed that as of January 1, 2023, the Optional Annuity for Dependent Children will be eliminated and the SBP annuity payment must revert to the surviving spouse (if the spouse submits documentation and is eligible).

Optional Annuity for Dependent Children Elimination/Annuity Reversion to Surviving Spouse in 2023

SBP annuities that were directed to a child rather than a surviving spouse will revert to the surviving spouse (if she or he is eligible and has submitted documentation to receive the benefit) as of January 1, 2023.

Beginning in November, we can start accepting and begin reviewing eligibility documents for surviving spouses who had the SBP annuity directed to a dependent child because of the Optional Annuity for Dependent Children.

Although the effective date of the change is not until 2023, we will be mailing you a packet with the documents we need from you late this year. If we receive your completed documents early, we can provide you with the assessment of your future SBP eligibility well in advance of 2023. Look for this packet in your mail in late November or early December of 2021.

If you remarried after the death of the member (before age 55), you may not be eligible for the SBP annuity. We must receive a reply from you, even if you believe you may not be eligible due to remarriage. If we have the documentation to make a determination that you are not eligible, we can continue to pay the annuity to an eligible child, even after January of 2023. However, if we do not receive documentation allowing us to confirm you are not eligible, the child annuity payments must be suspended as of January 2023. Therefore, we ask that you complete and submit the documents even if you believe you may not be eligible for the SBP annuity.

What Surviving Spouses Need to Do

Surviving spouses and child annuitants do not need to contact DFAS at this time to notify us that they are impacted by the Optional Annuity for Dependent Children Elimination/Annuity Reversion to Surviving Spouse in 2023.    

Please check this special focus webpage for news and information regarding the elimination of the Optional Annuity for Dependent Children and the transition. We will post updates on this webpage when the eligibility packets for surviving spouses are in the mail, so please plan to check: https://www.dfas.mil/sbp2023childoptrev
 

Page Updated Sept 29, 2021