The Survivor Benefit Plan 2023 Active Duty/Line of Duty Optional Child Annuity Reversion

The SBP-DIC Offset Phased Elimination, set out in the National Defense Authorization Act for Fiscal Year 2020, repealed the authority for the optional child annuity for Active Duty/Line of Duty survivors as of January 1, 2023.

This means for the surviving spouse of an Active Duty/Line of Duty member who chose to have the Survivor Benefit Plan (SBP) annuity paid directly to an eligible dependent child or children, the annuity will revert to the surviving spouse (if she or he is eligible and has applied to receive the benefit) in 2023.

We developed this special webpage to provide news and information regarding the repeal of the optional child annuity and the transition. We will post updates on this webpage, so please plan to check it for news and information.
 

What You Need to Do

You do not need to contact DFAS at this time to notify us that you are impacted by the SBP-DIC Offset Phased Elimination or the reversion of the optional child annuity in 2023. DoD, DFAS, and the military services are working together to facilitate a smooth transition.
 
Please watch for additional information coming in the fall of 2021 about the application process for the reversion of the SBP annuity for surviving spouses who previously chose the optional child annuity.
 

What is the “Optional Child Annuity?”

When a currently-serving member dies in the line of duty on active or inactive duty, the surviving spouse has the option, in consultation with the Secretary of the Military Department, to choose to have the Survivor Benefit Plan (SBP) annuity paid directly to a dependent child rather than to receive the benefit for him or herself.

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.

This option allows the surviving spouse to receive Dependency and Indemnity Compensation (DIC) from the VA without it affecting the SBP payments. This is because SBP paid to a child or children is not offset.
 

What Will Happen 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 applied to receive the benefit) as of January 1, 2023.

Keep in mind that 2023 is the third and final phase of the SBP-DIC Offset Phased Elimination. Beginning January 1 of 2023, the offset is eliminated, so spouses will receive their full DIC payment from the VA and the full SBP payment issued by DFAS (see our SBP-DIC News webpage).

If you are ineligible because you remarried prior to age 55, the annuity will continue to be paid to your eligible children.
 

What Happens Between Now and 2023

If your child or children are the designated SBP beneficiaries because you selected the optional child annuity, they will continue to receive the SBP payments (if they are eligible) until the SBP-DIC offset is fully eliminated in January of 2023.

If your child or children lose eligibility because they marry or reach age 18 (or age 22 if a full-time student) prior to January 1, 2023, the annuity will be suspended until January 1, 2023, at which time it will revert to you.
 

Additional Information

 
The repeal of the optional child annuity, and the reversion of the annuity to the surviving spouse is mandated by the law, so it is not voluntary.