The SBP-DIC Offset Phased Elimination: What Surviving Spouses Need to Know About 2023

Next year, on February 1, 2023, surviving spouses will receive their full Survivor Benefit Plan payment from DFAS and their full Dependency and Indemnity Compensation (DIC) payment from the VA. This is because February 1, 2023 will be the first SBP annuity payday after the SBP-DIC Offset is fully eliminated, which takes effect January 1, 2023.

The Special Survivors Indemnity Allowance (SSIA) will no longer be paid after the January 3, 2023 payment, because SSIA is only paid to spouses who have their SBP payment offset by DIC.

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.

To help spouses who are entitled to both SBP and DIC in 2023 understand the effect of this change, DFAS will mail letters in early December with individual estimates of 2023 SBP payments.

Check out our new Quick Reference Guide on the special focus webpage:

Phase Three: Effective January 1, 2023

In the third and final phase that begins January 1, 2023, the SBP-DIC offset will be fully eliminated. That means spouses will begin to receive their full SBP monthly payments with no offset (reduction) beginning with their January 2023 entitlement, which will be paid 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.
What Happened During 2022 – Phase Two of the SBP-DIC Offset Phased Elimination

January 1, 2022 marked 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 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 are not affected.

The SBP monthly payment is 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) in 2022, up to the maximum amount of $346 per month, or up to gross amount of SBP (if the gross amount of SBP is less than $346). Beginning with the February 1, 2023 payment, no SSIA will be paid.

Summary – Phase Two

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

Additional Notes

You do not need to call to notify us you are affected by the changes in the SBP-DIC Offset.

Spouses should receive a January 2023 Annuitant Account Statement (AAS) near the time of their February 1, 2023 payment that will show the full SBP payment. There will be no SSIA payment because the SBP-DIC Offset will be fully eliminated beginning January 1, 2023.

Survivor Benefit Plan (SBP) payments are paid the first business day of the month following the entitlement, so January 2023 SBP entitlement payments are made on February 1, 2023.

Annuitant Account Statements are available in your myPay account:  

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.


Check out the full range of Frequently Asked Questions and download our new Quick Reference Guide on the SBP-DIC News webpage:

We also have a webpage explaining SBP, DIC and SSIA:

Page updated Sep 28 2022