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Forms Frequently Asked Questions
The National Defense Authorization Act for Fiscal Year 2020 repealed the authority for the Optional Annuity for Dependent Children for Active Duty/Line of Duty survivors as of January 1, 2023.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 requested 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 in 2023 (if she or he submits documentation and is eligible) .
Please note: The Optional Annuity for Dependent Children is only allowed when the service member died on active or inactive duty, in the line of duty, after October 7, 2001.
If you are the surviving child (or the parent or guardian of a surviving child) of an Active Duty/Line of Duty member whose surviving spouse requested to have the Survivor Benefit Plan (SBP) annuity paid directly to you, here is what you need to know: There are three situations where an eligible SBP child annuitant can continue to receive the SBP monthly payment after the elimination of the Optional Annuity for Dependent Children in 2023: 1. If DFAS receives documentation that the service member was not married at the time of death. 2. If DFAS receives documentation that the surviving spouse is deceased. 3. If DFAS receives documentation that the surviving spouse remarried prior to age 55.
Please note: the documentation needed for a deceased spouse is a copy of the certified death certificate, along with the full name, daytime phone number, and mailing address for the person submitting the documentation. The death certificate must be certified by the government agency issuing the document. DFAS cannot accept a funeral notice or funeral booklet. It must be the government-certified death certificate or statement and that certification must be evident on the document. **Check Out Our Quick Reference Guide to the SBP 2023 Optional Child Annuity Reversion** (right click and choose “Save link as...” or long-press to download the packet to your computer or device)
SBP annuities that were directed to a child rather than a surviving spouse must revert to the surviving spouse (if she or he submits documentation and is eligible) as of January 1, 2023, for the February 1, 2023 payday. Keep in mind that 2023 is also 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 the surviving spouse and you have already submitted your eligibility documents: In some cases, it may take us some time to do additional research and notify you regarding your eligibility. We appreciate your patience. Once we complete work on your documents, we will send you a postal letter with the eligibility determination and additional information. Reminders • January 2023 benefits were paid on February 1, 2023. SBP benefits are paid on the first business day of the following month. • Please remember to update us if your mailing address, direct deposit, or marital status changes. • SBP payments are subject to federal taxes. State and local taxes vary. We are not able to withhold state or local taxes from SBP payments.
We mailed eligibility packets in mid-November 2021 and again in early June of 2022 to spouses who did not respond in 2021. This packet includes the documents we need you to fill out and return. The documents will help us determine your eligibility for SBP annuity payments and set up your account to begin your payments (if you are eligible) when the changes take effect in 2023.
Sending Your Documents
Upload a PDF of your completed/signed documents via the online upload tool (this link is case-sensitive): https://dvidshub.net/r/5lghqg
If you remarried after the death of the member (before age 55), you may not be eligible for the SBP annuity. We need to 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 until we receive the documentation. See the information below on which documents we need. Surviving spouses maintain their eligibility for SBP until death, as long as they do not remarry before the age of 55. If the annuitant remarries before age 55, annuity payments will stop. However, if the annuitant's marriage later ends for any reason the annuity payment will restart, once DFAS is notified. See more information at: www.dfas.mil/managesbp
Click here - If you are the surviving spouse of a service member who died on active duty or on inactive duty in the line of duty and you previously requested the Optional Annuity for Dependent Children Click here - If you are the surviving spouse of a service member who died on active duty or on inactive duty in the line of duty and you previously requested the Optional Annuity for Dependent Children, and you believe you may not be eligible for the SBP annuity payments because you remarried after the death of the member and before age 55 Click here - If you are not the surviving spouse, and the surviving spouse has passed away Click here - If you are not the surviving spouse, and the surviving spouse is not capable of managing their financial affairs * * * If you are the surviving spouse of a service member who died on active duty or on inactive duty in the line of duty and you previously requested the Optional Annuity for Dependent Children, you may be eligible to begin receiving SBP annuity payments directly (without offset) beginning January 2023. We need the following documents to determine your eligibility. ***Click here to download a blank eligibility packet*** (right click and choose “Save link as...” or long-press to download the packet to your computer or device) Please fill out, sign and return the following four documents as soon as possible: (1) 2656-7 Verification for Survivor Annuity form (please note: you can disregard sections 4, 5 and 6 on the 2656-7 form, so they have been removed from the special version in the eligibility packet); and (2) Certificate of Eligibility (COE) for Surviving Spouse; and (3) Direct Deposit form 1059; and (4) IRS W-4P Withholding Certificate for Pension or Annuity Payments. Note: If you do NOT bank with a U.S. Bank, please see the information on International Direct Deposit below Note: If you are a nonresident alien, please also fill out and return the following document: IRS Form W8-BEN If you do not have a Social Security Number, we need a TIN.
SBP payments are subject to federal taxes. State and local taxes vary. We are not able to withhold state or local taxes from SBP payments. ***Check Out Our New Quick Reference Guide to the SBP 2023 Optional Child Annuity Reversion*** (right click and choose “Save link as...” or long-press to download the packet to your computer or device)
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. 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. The annuitant may be a surviving spouse or surviving child (but not both). When a service member dies on active or inactive duty in the line of duty, the surviving spouse can request to have the SBP annuity paid directly to an eligible dependent child or children. This is called the “Optional Annuity for Dependent Children” but often referred to as “the optional child annuity.” The option is available because until recently, there was a requirement for a spouse’s SBP payments to be offset (reduced) by the full amount of the spouse’s Dependency and Indemnity Compensation (DIC) payment from the Department of Veterans Affairs (VA). Payments to the surviving child were often considered a more favorable option because SBP paid to a child is not required to be offset (reduced) by the DIC payment. The Optional Annuity for Dependent Children 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 (NDAA) for Fiscal Year 2020 modified the law that requires an offset (reduction) of SBP payments for surviving spouses who are also entitled to DIC payments from the VA. It directed a phase-out period to eventually eliminate the entire offset (reduction). Beginning on January 1, 2023, surviving spouses can receive full SBP payments from DoD/DFAS in addition to their full DIC payments from the VA. The NDAA for Fiscal Year 2020 also 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 surviving spouse submits documentation confirming eligibility).
SBP annuities that were directed to a child rather than a surviving spouse must revert to the surviving spouse (if she or he submits documentation and is eligible) 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 remarried after the death of the member (before age 55), you may not be eligible for the SBP annuity. We must receive documentation 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 until we receive the documentation. Please see the information above about what documents we need.
If your child or children are the designated SBP beneficiaries because you selected the Optional Annuity for Dependent Children, 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 (if you are eligible and submit documentation).
The repeal of the Optional Annuity for Dependent Children , and the reversion of the annuity to the surviving spouse is mandated by the law, so it is not voluntary.